One Night Standingby Joe Krutsinger Strategy 2
In this issue, we explore a strategy proposed by a forum member with the nickname Ijo de Puta. The tactic is based on the price range of the daily candles, as well as the assumption that we have wide movements on Fridays due to the frequent release of market news on that day.
The strategy is a refinement from a version of the tactics One Night Standing by Joe Krutsinger. It uses price analysis and the search for breakout levels based on the 9-day range, as well as moving averages to determine the global trend. In addition, the strategy involves placing orders exclusively on Fridays and according to fairly simple rules that can easily be used even manually.
The basic rules of the strategy
1. Buying deal: on Friday at 00:00 we make search of the maximum price for the last 9 days. We establish the order on purchase at level of the found maximum, plus 5 points.
2. A bargain for sale: on Friday at 00:00 we search the minimum price for the last 9 days. We establish the order on sale at level of the found minimum, minus 5 points.
3. StopLoss is set at 40-90 points from the price.
4. Applies TrailingStop at a distance of 40-90 points from the price.
5. All trades and orders are closed at 23:00 the same Friday.
As you can see, I didn't deceive you, the rules are really very simple and available for trading even with your hands. But our task is to check whether this tactic is profitable to use in trading. That is why we will take our usual way - by writing an Expert Advisor that will show us the effectiveness of the proposed trading algorithm promptly on the history. Let's conduct a test.
Testing the strategy by the author's rules
Since the system is supposed to work only on Fridays from 00:00 to 23:00, let's check its work without using the Stop Loss. That wide Friday range, which the author hopes for, can play against it if the stop level gets into a corrective movement. The test is traditionally performed on EURUSD, hourly chart, for the period 2006-2010.
As we can see, this approach was not successful. For a long time the balance was actually in the "zeros", and then it fell dramatically. Let's try working with the StopLoss. We traditionally perform the test on EURUSD, 1-hour chart, from 2006 to 2010.
We didn't see anything new or interesting this time either, StopLoss did not bring the desired effect and definitely was not a panacea. Perhaps, this is due to the specific behavior of the EURUSD pair. Let's see what the expert will show us on other currency pairs.
First we will be interested in the currency of our issue today: the pound, namely the pair of GBPUSD. We use the same hourly chart in the same range from 2006 to 2010.
Now this is something. In spite of the tattered look of the chart, the deposit has almost doubled, which cannot but please the author. Maybe he just didn't tell us the secret of which pair to look at right away?
The next test subject will be the yen. Conditions are the same: hourly chart, testing period - 4 years. Let's see what happens.
With varying success. At USDJPY I would certainly not recommend working unless you are a super risky trader. There is no telling what zone you will get into: a rapid growth or an avalanche drop. In the end, our earnings were 50% of the initial deposit.
Testing the strategy on Canadian dollar I was most pleased with it. A steady growth of the balance curve, more than 100% increase in the deposit. Everything is very nice and attractive. We conclude that the "commodity traders" work out the Friday rules well. Let's look for confirmation in another representative of this class - the Australian dollar.
A couple of. AUDUSD, hourly chart, testing period: 2006-2010. In principle, we have proved the positive performance of commodity currencies. However the fact that only recently (the crisis time) the pair "shot", says that probably at the recovering market we won't see such a picture. Therefore we exclude the pair from further investigation.
As a result, our contenders are USDCAD and GBPUSD. I suggest to investigate the currency of the room, since we are talking about it today. With the Canadian, I'm sure, you will figure it out on your own.
Optimizing your trading strategy
So, pound sterling.
As we see in Figure 7, there are parameters that increase the profitability of the system by more than 20 times. However, the percentage of maximal drawdown does not please me at all - not every trader is able to bear losses of 50% of the accumulated deposit before he or she recognizes the tactic as non-performing. Therefore we choose the third most profitable variant with the lowest maximal drawdown of 24%, especially because the forward tests A system with these parameters is just as satisfying.
In addition, consider another option for good parameter work. So to speak, for the reader's choice.
Testing the Expert Advisor with new parameters
Download the report. Download Options.
There is something to delight the eye: Anticipation Winning 316, Maximum drawdown 13%, net profit 112 thousand, and all this from a deposit of 5000 dollars. Especially impressive is the continuous profit of 28.5 thousand against a continuous loss of only 7.8. In this situation, the only thing that makes me sad is that the tactic works only on Fridays...
Consider the other parameters of the same pair.
What do we see? Again an excellent test for the future period. Profit, of course, is greatly reduced, but maximum drawdown is only 8%, and the statistics on winnings are much nicer. These parameters also have the right to life, but for more conservative traders who are focused on stability, not on high profits.
Drawing conclusions
The results of the optimization and the test on the off-optimization section have shown that the strategy has a rational grain and is quite suitable to be applied even on real accounts. The fact that you only have to work on Fridays and the rules are quite simple to follow makes it attractive for beginners as well as for masters traders as an additional income. But in any case, remember that before you put an Expert Advisor on a real account, you must be confident in its performance.
Description of the parameters of the obtained EA:
– timeopen - hour to start the parameter search.
– timeclose - the hour of removing and closing positions.
– maper10 - period of the first moving average.
– maper40 - period of the second moving average.
– maxdays - the number of candlesticks on which to look for the maximum/minimum.
– indent - the indent in points from the maximum and minimum when placing an order.
– Mn - multiplier, for the fifth digit indicate 10.
– StopLoss - the size of the StopLoss.