Forex trading strategy #5 (5x5 Simple system)

Hi Javier,
For trading in range bound markets traders often use Bollinger band based strategies and channel breakout methods.
On this website examples would be:
Bollinger bands based approach at
http://forex-strategies-revealed.com/gbp-jpy-scalping

Breakout system general idea at
http://forex-strategies-revealed.com/trading-strategy-trendlinetunnel

with the following strategies (their names often have word "breakout" in them) such as:
http://forex-strategies-revealed.com/simple-breakout-system

Regards,
Edward

Hello Edward:
I have reviewed some strategies and I think these are great.
What are the best strategies of the whole website for range bond market?

Thanks in advance
Regards,
Javier

simple

Smooth or simple?

Hey Edward,

Thanks for your reply, I understand.

Best Regards,
Pasi

Hi Pasi,

I don't have the data about the systems being back tested by a software for several years back.

I know that without such data I have little chance to convince you or anyone else with the profitability of the systems, but this is also something I have no real time for. Please understand me correctly.

I have traded with the systems posted on the website live: some for several years, some for 7-9 months. I saw them working, that's why I offer it to others.
I leave it to traders to test backward and forward the systems they choose.
Sorry if it sounds disappointing in any way, but I hope you understand my position.

Kind regards,
Edward

Hey Edward,

I've been testing some of the strategies with small bets and received actual results, however, the sample size is still relatively small. In addition, from the graphs, I've seen how they have worked in the past six months.

I feel this is not the proper way to test, I would be more convinced if the strategies would be tested against data of several years by a software. My own experimenting can give good results in the beginning, but I might be dealing with a system that has a negative expectancy. Do you have any test data about the strategies mentioned on this site / are the systems backtested using several years data ?

Best Regards,
Pasi

Hi Pasi,

For testing I hold a small live account, where I trade mini lots.
I'd be more than happy to post testing results, however, since I run numerous test and experiment with different strategies simultaneously there will be no individual data for any particular strategy.

We try to encourage users to test run Forex systems on demo accounts, that's the only work they are required to do after having the system rules on their hands.

Kind regards,
Edward

Hey Edward,

How do you perform your testing? Is there a way we could see the results of your tests, I'm particularly interested to see the results of this strategy (for daily charts).

Regards,
Pasi

Hi Paul,

From my testes the strategy performs well on weekly charts too.

Summary: For daily charts

Entry rules: Enter Long when the bar crosses and closes above 5 SMA and next daily candle makes +10 pips up, the RSI must be over 50. Enter Short when the bar crosses and closes below 5 SMA and next daily candle makes +10 pips down, the RSI must be less than 50.
Exit: with first candle to break and close(!) on the other side of 5 SMA. No RSI signal required.

For weekly charts:
Entry rules same as for daily.
After the first week of trading set S/L to breakeven.
Exit same as for daily charts.

Regards,
Edward

Hi Lynn,

Sure, you can move your stop to protect profits. I'm doing so all the time.
However, if profits are too small, I prefer leaving my stop at break even till I get some decent pips to protect. This way I don't hunt for small profits too soon and make sure that when a big move comes in I will have a position running.

Regards,
Edward

Edward:

One more question concerning setting Stop Loss Levels for this strategy. Once the trade closes "in the money", would you recommend moving the Stop Loss to the previous day's low (for a Long Position) or previous day's high (for a Short Position)? I am trying to make sure I capture as much profit as possible before the trend reverses. Would this practice be good for all day or swing trading strategies? Thanks, Lynn

Hi Lynn,

It is simply the first candle to break and Close on the other side of 5 SMA. No RSI signal required.

Regards,
Edward

Edward,

Thanks for agreeing to test this strategy on a weekly timeframe. I am curious of its success. Meanwhile, you posted a response concerning Stop Loss Levels: "I would recommend setting a stop loss for a Long position: 5 pips below the candle which closed above 5 SMA for the first time. Same when Shorting - 5 pips above the candle that has closed below 5 SMA for the first time." Is that the first candle to close above/below 5 SMA that also has RSI confirmation, or just the candle that breaches the 5 SMA period? Thanks, Lynn

Hi Fitri,

I would use exit rules from this trading system.

Regards,
Edward