Universal Forex Strategy

Hello, dear readers. In this issue of the magazine, we will look at the "Universal Forex Strategy". This system is based on three indicators, is quite simple to use, but at the same time with a twist, so it will suit both a beginner trader and a long-time practitioner as a supplement.

Signals of the universal Forex strategies are based on three indicators: moving average EMA with a period of 300, Nonlagdot and Supertrend. The exponential moving average with a period of 300 (EMA (300)) allows us to determine trend direction, it is in the direction of this average that we will open trades. The other two indicators are used to open trades and filter signals each other. Transactions under this strategy are opened only on pending orders.

Buying signals

1) The price is above the EMA (300);
2) The Nonlagdot indicator changes the color of its dots from red to blue;
3) The Supertrend indicator turns green and the price is above it.
4) Set pending buy orders (Buy Stop), as soon as formed rollbackand the candle closed bearish (i.e. the closing price of the candle is lower than the opening price of the same candle) at the maximum of this upward movement + spread + 2-3 points (noise filter).
5) If one of the indicators, Supertrend or Nonlagdot, has changed its color, pending orders should be deleted! StopLoss set below the Supertrend indicator line or below the nearest local minimum and then move it as the Supertrend line changes.
6)    TakeProfit do not set, profit is fixed if:
a. The Supertrend indicator has changed its color to the opposite;
b. the price touched the Supertrend indicator line.

Fig. 1. Buying on the universal Forex strategy.

For transactions for sale we use the inverse conditions.

Examples of buy and sell trades are shown below in the "screenshots" (see Figures 1 and 2). Entries are shown with price marks, exits are marked with a cross.

Fig. 2. Selling on the universal Forex strategy.

The system advisor is ready and we can move on to testing.

Testing a trading strategy

Let's test the proposed system on several pairs with default settings for the last 2.5 years. The risk for each trade is set at 2% of the balance. The first test on EURUSD, hourly chart, initial balance $10,000 (see Figure 3).

Fig. 3. Test of the trading Expert Advisor on EURUSD.

As a result, the profit was $4204 or 42%. The maximum drawdown reached 38%. Quite a decent result.
The next test is on a pair of GBPUSD (see Fig. 4).

Fig.4. Testing the trading Expert Advisor on GBPUSD.

In contrast to the first test, here we saw a net loss of 18%, although twice reached a profit of 13%. Obviously, the pair with the pound is not quite workable for expert with the default settings.

Let's go further and look at the results on the pair USDJPY (see Fig. 5).

Fig. 5. Testing of the trading Expert Advisor USDJPY.

Here the system also showed a profit of 9%, although the maximum value reached 50%. The relative drawdown as a result was 33%.

And our test series concludes with a couple of AUDUSD (see Fig. 6).

Fig. 6. Testing the trading Expert Advisor on AUDUSD.

As a result we have a loss of 6%. Let's summarize... The best result has been obtained on EUR/USD pair and we will select it for optimization (in 2 years) and then check its results on the forward test.

Optimizing the trading expert

Основные параметры, которые могут повлиять на результат работы эксперта, — это риск в каждой сделке и период экспоненциальной скользящей средней, которая выступает фильтром для сделок. Именно их мы и будет оптимизировать (см. рис. 7).

Fig. 7. Optimization of the trading Expert Advisor.

Наиболее оптимальной с точки зрения прибыль/просадка оказалась следующая комбинация: MaxRisk=1.3 и период экспоненциальной средней — 60, который при тесте показал +1400 долл. Именно на этих результатах мы и проведем forward test for the last 7 months (see Fig. 8).

Fig. 8. Forward testing of the Expert Advisor with new parameters. EURUSD.

The settings have proven to work and over the test period the Expert Advisor has brought about 40% of profit with a small drawdown. With the same settings tests were conducted on other pairs, almost all of them were profitable.

Conclusion

The system has shown good results in testing, both on the history and on the forward test. Perhaps it will be possible to improve the results of the Expert Advisor by optimizing the indicator parameters on different pairs and timeframes. In general, the system is stable during long-term testing.

Files for downloading:

— experts.zip - trading Expert Advisor, indicators and template for working with the Universal Forex Strategy;
— tests.zip - the results of testing and optimization of the Expert Advisor for the Universal Forex Strategy.