Hi everyone,
I have a couple of systems I want to test. One has an aspect that I got from a friend (though I have changed it massively) so I am reluctant to post that system on line. The other idea is totally my own though so I am happy to post here. I can’t properly test it without an EA. It takes me ages to write EAs as I am a beginner so have to look everything up. You can see my system is in its infancy but it definitely has potential, I have coded and backtested a version of it with pending orders, which did alright but not consistent enough for me. You need to have a fairly decent sized stop loss as EURUSD is quite volatile and using pendings was meaning my stop loss had to be bigger and take profits therefore smaller.
My system:
EURUSD always seems to move at least 50 pips. Idea is to set up a trade when the frankfurt market opens. You need a fairly wide stop loss as it moves around a bit before it decides on direction.
I’m thinking 50 pips profit, 30 or 40 pips stop loss (need to optimise). THere is potential to add a breakeven to this reduce number of losses (maybe when it gets to 30 pips?). Also potential to get more pips maybe switch to a trailing stop at x amount of pips won or have a couple of trades with multiple targets. 50 pips does seem to be a bounce back level though.
For predicting the direction I did some basic analysis in excel, trying out a few potential indicators like, previous candles colour, if there is a pattern in previous candle colours et e.g if 3 out of 4 were up guess up. Mostly they were no better than random but one got direction correct 70% of time (in my tiny 3 month time period).
That one that seems to work is looking at what has happened in USDCHF in the 8 hour period prior (since the asian market opened). They negatively correlate so if usdchf went down I place my trade up. If it went up I sell.
My thinking is a system where you are correct 70% of the time and your risk to reward ratio is better than 1:1 should be great for long term profits. I am well aware though that I don’t have robust results yet though.
Can anyone code it for me and help me backtest and improve it? I am working full time in my banking job until end of September so have no time but after that I’ll be just focusing on trading. I’ll have time to do it myself by then but I am impatient.
It would be much appreciated. Hope my idea helps people make some pips.
Shona