[triphop]

Here’s a late Christmas present for you – a long-term strategy that’s been thoroughly tested. It doesn’t use indicators, can be easily programmed or done manually – whatever you prefer – and with a bit of tweaking can be used for any currency pair successfully. That said, I’m only going to trade it with GBPUSD because it works best and it has such low spreads, and I know the currencies well.

Good points:
- great results backtesting
- very simple and easy to trade
- works on simple solid principles (ie, it makes sense)
- is v useful to anyone trading this pair, irrespective of whether their following the system because it highlights areas of extremes where you need to trade carefully
- Some simple discretion can improve on the already good results
- You don’t need to be tied to a PC to trade it
- Altering any of the variables leads a gradual deterioration of results, not a sudden drop, making it more likely that it’s a solid strategy rather than an optimized fluke

Bad points:
- Large stops (400) = large potential drawdowns. That said, historically, v small % drawdowns (in 43 trades over 5 years, the most amount of consecutive losers was 2)
- Requires a lot of patience and ability to stomach losing months