Hello, everyone.
I developed a forex trading strategy and it is an intraday swing trading strategy.
This relies on chart patterns and some other indicators and I execute this strategy very mechanically.
This has been working for 5 years very well (3 years of backtest and 2 years of live trading), but I want to know how long it will work?
(** this strategy makes 190-220% a year. But this is not for advertising my strategy. )
Maybe you have found that the strategy works well on any single pair most of the time, but eventually performance decays for a period? Nothing in the charts is an obvious explanation and eventually performance recovers on that pair.
This seems to be a constant issue with mechanically applied strategies. Of course, trading the strategy across a basket of pairs should balance this tendency and smooth out overall profitability.
Is this pattern familiar?
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thanks for your reply.
I am using this strategy to 9-15 pairs including Forex, metals, commodities and stocks.
So work performance of my strategy is well balanced.
But how long will it work?
I think it will work forever, but want to listen to the others.
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there are certainly some systems/methods that have stood the test of time and are still working after many decades, just as there are others that haven’t and don’t
in my experience and opinion (and, to be fair, that of almost all my former colleagues in the trading world, as well), the robust ones that have better chances of real longevity and survival tend to be the ones based mostly on “chart patterns” or “price action,” while the ones based mostly on indicators tend, overall, not to do so well in the long term
i think this isn’t a huge surprise (if it’s true, overall!), and that there’s quite a lot written by Alexander Elder, Tushar Chande, Joe Ross and a few other authors which makes good sense of the subject and explains why it’s likely to be so …
… but a lot of people “want to believe in multiple indicators” and don’t like hearing it or analyzing it 