Hi guys, I read an article written by the owner of this site (babypips.com) and they have tested 6 common forex indicators (Bollinger Bands, MACD, Parabolic Sar, Stochastic, RSI, Ichimoku Kinko Hyo). The backtest shows the best forex indicator and the only one that made a profit is Ichimoku, which produced 30,000 pips over 5 years on a daily chart EUR/USD.
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As this is the only indicator that made money out of all the common indicators (according to the tests), so why not focus all your attention on this indicator and try to come up with a system based on this. However, 6000 pips a year is not exactly that spectacular, so I was wondering how successful this indicator would be trading a higher liquidity pair such as GPB/USD on a lower time frame (1, 5, 15, 30, 60 minutes).
This indicator was tested on EUR/USD daily time frame only. The parameters and rules used to test this indicator were 9,26,52. Cover and go long when conversion/turning line (Tenkan-Sen RED LINE) crosses above baseline (Kijun-Sen BLUE LINE). Cover and go short when conversion line (red) crosses below base line (blue).
Is there anyone who can backtest this indicator for me please and let me know which currency pair and time frame will yield the most pips? A comparison between all the common currency pairs and time frames using this indicator would be a wise thing to do. Unfortunately, I don’t know how to backtest this myself as I’m only a beginner in forex, although I wish I knew how to do this myself. Thanks in advance.
It was one of the three indicators I was testing on Hotforex demo 3 years ago, but Ichimoku didn’t show any substantial results (there could be incorrect backtest settings though) so I moved on fundamental analysis after a while.
There are several ways to trade using this indicator, maybe you used the least profitable method for backtesting. This indicator was tested on EUR/USD daily time frame only. The parameters and rules used to test this indicator were 9,26,52. Cover and go long when conversion/turning line (Tenkan-Sen RED LINE) crosses above baseline (Kijun-Sen BLUE LINE). Cover and go short when conversion line (red) crosses below base line (blue).
I strongly disagree with you here. Make 6,000 pips every years consistently and you are doing great. Most will never get to this point and a lot of newbies think that earning a few hundred pips per day is what successful forex traders do. 6,000 net pips per year is a great return many pros may not be able to deliver.
I strongly disagree with you here. Make 6,000 pips every years consistently and you are doing great. Most will never get to this point and a lot of newbies think that earning a few hundred pips per day is what successful forex traders do. 6,000 net pips per year is a great return many pros may not be able to deliver.
You’re right, 6,000 pips per year is great but there’s always a potential to make more and also every little helps. If you can make more by simply switching your charts to another time frame or currency pair, I don’t see any problem with that. Can anyone backtest this indicator for me please and let me know which currency pair and time frame will yield the most pips? Cheers
Backtesting is worthless. If you read a book on building trading systems, backtesting leads to optimisation which means your system will most likely fail in the future because market conditions change. You are essentially optimising your system to suit a specific set of data in your backtest. The professional traders that build winning systems use walk-forward analysis. Look it up or read a book so that you can do it yourself. Don’t rely on other people to do important analysis for you. Don’t be lazy.
Of course there is nothing wrong with making more, but get to the point of making 6,000 pips consistently first. As far as back-testing is concerned (besides the fact if it is worth it or not), that is something you need to do. I don’t see why others would bother for you.
Of course there is nothing wrong with making more, but get to the point of making 6,000 pips consistently first.
I’m doing my research before I invest my time and money in this indicator. It’s always better to be safe than sorry. Figuring out which time frame and currency pair is the most profitable for this indicator will reduce my chances of making a loss.
Don’t rely on other people to do important analysis for you. Don’t be lazy.
If I knew how to backtest, I would have done it myself which is the reason why this forum was made. I’m sure anyone who is also interested in this indicator and knows how to backtest, wouldn’t mind sharing their findings and opinions on here, after all that’s why the forum was made right? If no one is bothered to talk about it or help each other, then what’s the point of coming here. So don’t judge and please keep it positive. Cheers
Secondly, I know you don’t know how to test if a system/timeframe/etc is profitable or not. That’s why I advised you to go and read a good book about building winning trading systems.
As a trader, you need to be able to make your OWN decisions. If you rely on other people’s methods then you might as well just give them your money to manage for you. There’s nothing wrong with discussing but at least try and do something yourself first. Don’t just read an article and then decide to go on a forum and demand that people do your testing for you. Testing a system to see if it is robust takes a long time (days/weeks depending on the data and whether or not they are using software or doing it manually on excel or something).
I’m not being negative. I’m trying to give you advice that will save you from losing too much money in the long-term. You need to understand why a system works and how it works and whether or not it will continue to be profitable in the future. Trading is the most meritocratic endeavour in the world. If you’re not willing to put your heart and soul into learning how to do it successfully then you will lose.
It all depends where u get your TK cross There is basically 3 diff zones u cant a signal. Strong med and weak. you also have to check where the lagging line is in relation to the cloud. Also pay attention to the kumo cloud
Ofcourse I’m going to make my OWN decision. I just want to see what people think about babypips.com backtesting of the Ichimoku indicator. So you’re saying the owners of babypips.com is a load of rubbish because they are the one’s that did the backtesting! If backtesting is worthless, so you’re basically saying babypips.com is worthless too because they obviously don’t think backtesting is worthless otherwise they wouldn’t have backtested it in the first place. And by the way, they (babypips.com) recommended me to request (NOT demand) someone on the forum to backtest it for me. If you think backtesting is worthless, you need to argue this with babypips.com, not with me.
It all depends where u get your TK cross There is basically 3 diff zones u cant a signal. Strong med and weak. you also have to check where the lagging line is in relation to the cloud. Also pay attention to the kumo cloud
I know there are several ways to trade with this indicator but I think they ignored the clouds when they tested the Ichimoku indicator. They only used the (Tenkan-Sen RED LINE) and (Kijun-Sen BLUE LINE) crossover when they backtested the Ichimoku. That’s what gave them 30,000 pips over the 5 years.
You really shouldnt ignore clouds they r very important for ichimuko. I your future cloud is dark-bearish then you shouldnt really go long if u get a bulllish TK cross cause that is considred a weak signal. the lagging line will still be below the cloud. In that case of a bullish cross under cloud u should wait till lagging line crosses above cloud and u get a kumo twist.
If trend is down and price is too far from tekan sen wait for pull back to line and pay attention to PA to tell u when to exit short.
If im confusing u let me know and ill go back, Im not such a good teacher but ill try to explain best I can
I’m just saying that I have read many posts in the past on this forum and other forums where people are upset because they backtested a strategy and found it to be super profitable but then they tried it on a live account and the strategy performed terribly in reality. A good backtest result usually doesn’t automatically mean that you have a successful trading system.
With regards to Babypips, I love this site. It is an amazing resource for beginners to learn about forex and to get a good foundation on how to trade whilst managing risk. But the Babypips website is not the be all and end all of trading. They are not market gods, constantly raking ridiculous amounts of money in from trading.
Professional traders don’t spend the time to build a popular forum and make money off advertisements. They are too busy building and experimenting with new strategies and making huge money form trading.
At the end of the day, you need to invest in yourself and question everything. Don’t just take it at face value. There’s a reason why 90% of traders lose in trading (probably because they spend all their time jumping from one magical indicator to the next crying about how amazing their backtest results were).
Anyway, goodbye and good luck with your trading journey. You’ll need it…
People wont like it but the best I found to work so far is the moving average! Thats it! the rest that I have tested with EAs gave really poor results
What settings on moving averages worked for you best? How do you use it to trade? What currency pair and time frame (chart) are you having the most success with?
You can do so manually by scrolling the chart and noting down the entries and exits.
I am tempted to go on a lengthy post on how there is no best indicator and how an indicator DOES NOT even come close to a trading system. But in summary, if your decision making process is simple binary using a single indicator, I’m sorry it’s not going to work out as you expect. But nvm what I say, you can go try, after all we have all been there.
In forex all trader had their different ideas about different tools and indicators. I like RSI and Moving average. More is on your practice with indicators . After several times of usage they find their best indicator .
