Round numbers trade system

[agimus]

Hi Guys,

my first post here:

I have read that in majority of cases when price comes to round 00 numbers (1,6600, 1,6700 etc), it will be pushed forward at least 10-15 pips because of execution of stop orders at those numbers.

The exceptions of course are when the market is consolidated around 00 numbers.

To avoid those situations, my filter rule is not to enter a trade if the price hasn't moved at least 35 pips from the round number after it hit it.

I have backtested this system for last month and it seems that it works good on generaly high volatility pairs like GBPUSD, USDJPY, EURJPY,USDCHF, works so so on AUDUSD and EURCHF and don't seem to work at all on EURUSD,EURCHF and USDCAD which are in general more 'quieter' pairs.

So rules are:

Enter trade when price has hit round number.
15 pip profit target
20 pip SL
Do not enter a trade if price hasn't moved at least 35 pips after it hit round number.

My backtesting shows that trading GBPUSD, USDJPY, EURJPY and USDCHF you can earn 100 pips per week, with 3 pip spread.

Is there someone who could program this strategy and test it on AE for a larger period of time?

Rules are pretty simple and I feel this could be a nice consistent system.

Cheers to all

[underdog261]

what do u mean by 35 pip - do u mean a 35 point oscillation around the 00 level?

[omadivi]

nice...thanks for the tip, i neva really noticed it....i was wondering if you had any ideas about how trust funds traded. its a paper i am working on, and i dnt have any sources...
thanks..

[agimus]

Hi,

lots of time when price hits 00 number it will rarely just penetrate it and go through or get exactly to that number and then retace back. It will usually stay around that number +- 20 pips and then either retrace down or continue up.

When the price hits 00 number it happens in lots of cases that it hit it multiple times again, but then momentum is lost.

For example, price comes from above and hits 1,600. You go short from 1,600 to 1,582 (15 + 3 pip spread). Then it can go to 1,610, then back to 1,590, then 1,605 etc, hope you get the picture.

If you were gone into trade every time it hits 1,600 number after the first time than you would have multiple losses.

But you wait for price to come significant from 1,600, and that is 35 pips away from most of my observations. Once it goes that far, it will again gain momentum when it hits 1,600 and will usually penetrate it again at least 15 pips.

Of course, this way you will also get some swears like with any other system, but that is how I manually backtested it and got those results.

What I would like to see is someone backtest it in long term, let's say few years behind for every pair.

Rules are pretty simple and I suppose that shouldn't be a big problem for someone who is skilled at programming.