Cowabunga System (by Big Pippin)
I’ve been wanting to cover this system for a long time but I didn’t have enough patience to backtest the values manually, but now that I know how to write indicators and strategies I figure I’d give it a go.
It’s a very simple system designed for beginners to get grips on how a system could look like.
I saw a strategy already lying around on TradingView which apparently backtests the Cowabunga System, but after some manual backtesting I saw some entries / exits that were not aligned to the rules of the system.
So the rules for this system is quite simple:
For long entry, these values has to match:
- EMA 5 line (red) crosses over EMA 10 line (blue)
- RSI is over 50
- Stochastic is on an uptrend and not overbought
- MACD histogram is on an uptrend
For short entry,
- EMA 5 (red) crosses under EMA 10 (blue)
- RSI is under 50
- Stochastic is on a downtrend and not oversold
- MACD histogram is on a downtrend
In addition, we also have to pay attention to the 4H timeframe to get our maintrend.
So writing the strategy is where my variation of the strategy starts, because the exit and stop losses are not defined on set values, they are more manually set. So what I’ve done is done position reversals.
If no position is open and a buy is triggered, open a long position. close the position when the sell is triggered
Same with the sell triggering.
One thing to note is that I didn’t incorporate position adding if the same position is triggered in the same period. So potentially there could be multiple buy triggers, but all of them are ignored except the first buy trigger.
Backtested from last week, took 8 trades in total, 87% profitable! what crazy results. There were 18 buy / sell signals triggered, but only 8 trades taken in total.
Backtested this specific stock, took 3 trades, all losers. Not very good results I would say.
Backtested from beginning of June, 59% profitable. Not as good of results as forex.
I also tested with the other FX majors and they all performed relatively good.