Trading strategy 200 pips in the morning
In this issue we explore trading strategyThe strategy is based on the moving average and the time range. The strategy was told by the forum member with the nickname anatolypHe says he uses this tactic daily in manual mode, but because most of the trading takes place at night, it is not always possible to get a full profit. Let's see if we can automate it and confirm the author's expectations.
The basic rules of the trading strategy
1. Buy signal: We open buy Monday through Friday from 00:30 to 1:15 if the price is below the 21-period moving average. The Oder is set 5 pips below the current price.
2. Sell signal: sell open Monday through Friday from 00:30 to 1:15 if the price is above the 21-period moving average. The order is set 5 pips above the current price.
3. StopLoss is set at 30 points from the price.
4. TakeProfit is set at 20 points from the price.
5. Applies TrailingStop at a distance of 5 points from the price.
As you can see, the rules are very simple and available to trade even manually. It is not for nothing that our author has done exactly that and is quite successful according to his words. However, we have repeatedly proved that not everything simple is perfect for the market, so let's test the viability of the idea.
Testing the trading strategy of the author
As we were advised to do anatolypThe test is conducted on the EURUSD currency pair, on the 5-minute chart during the period from 2008 to 2010. Let's see the result.
Frankly speaking, I expected more. We have received only 35 points of profit as a result of testing, but the loss has accurately "eaten up" all the $ 1000 invested in trading. Slowly I start to get the feeling that the author of the strategy trades more on intuitive abilities, so he does not make all trades, but only profitable ones.
Well, let's give the trading strategy another chance and test it on other currency pairs. Let's start with the pound. The conditions are the same: the test period: 2008-2010, 5-minute chart.
This time we were also unlucky. Although the balance chart still stayed on the positive side a little longer and made 12% profit, but as a result we also lost.
I suggest that our next candidates be Japanese, Australian, and Canadian. With the same rules and the same characteristics. Let's see if the tactics depend on the investment status of the currencies (see Figures 4-6).
Well, experience has shown that if it depends, it depends very little. None of the pairs was able to please us with the positive dynamics of the balance chart, although in the pairs with the Japanese and the Canadian we did not get MarginCallwhich can't help but be happy in such conditions.
It remains for us to go the old tried-and-true method of optimization, perhaps a systematic change in tactics will still allow us to achieve the desired results.
Optimizing the author's version of the tactic
Since none of the pairs has given us any meaningful results, we will optimize on the euro/dollar, which is the author's favorite.
As we can see in Figure 7, the optimization process has resulted in a great number of parameters that have been effective for 2009.01.01-2010.01.06 and that gives us some hope that perhaps the tactic has the right to exist, but with somewhat different parameters. Here is one, the one that seemed the best.
Testing optimization parameters
Testing will be conducted according to the same criteria, we try to get decent results. Optimization was carried out in 2006-2009, and we are testing for the future until today.
Download the report. Download Options.
It is quite solid, even based on the fact that the trading tactics are frankly very simple and it is difficult to find any economic reasoning in it. From the many parameters we selected those that showed a good ratio of profit, maximum drawdown, and number of trades. Nevertheless, it is difficult to call the results stable, so it is recommended to introduce a note of rationality into the rules before using them, at least based on the night flytrap.
You can pick up good parameters for other currency pairs by yourself using the set file.
Conclusions
Once again we were convinced that very simple rules are not suitable for trading. The saying "All brilliant is simple" does not work at all on exchanges, apparently, because simple can hardly beat a serious set of supercomputers in the form of brain matter of so many speculators. The grail for sure can only be such a system, which no one has used before you, because so far there is no way to resist its work.
Tactics, of course, has the right to exist, since it brings the author a profit, but I still recommend him to think about whether only the strategy gives him a profit, perhaps the human factor intervenes in the case...
Description of the parameters of the obtained advisor
- starttime starttimemin - hours and minutes of the start time.
- stoptime stoptimemin - hours and minutes of the end of work.
- maper - period of the moving average.
- TP SL - Size of Take Profit and Stop Loss in pips.
- otstup - the indent in points from the current price to set an order.
- DeleteType - method of deleting a failed order: 0 - not deleted. 1 - deleted after the allowed trading time. 2 - deleted the next day. 3 - at installation of the opposite order.
- UseTrailingStop - use trailing stop: 1 - use. 0 - do not use.