The Cowabunga System on a 4hr chart?

Hey everyone,

I’ve been experimenting with the Cowabunga system for awhile now with good results, and recently started using it on a 4hr chart - using the exact same indicators and entry methods. I’ve back tested many currency pairs with great results. It’s fits my trading style better, where one only has to check every 4 hours for entry points. It seems that there are little to no fakeouts, once the 4hr trend is in motion I hop aboard and it is almost a guaranteed win. Just wondering if anyone else is using any sort of system like this, or if anyone has modified it to be even better; ie. Different EMA’s or different indicators?

Thanks and happy trading!

I am very interested in this system on a longer chart, does the trade run longer and have a higher pip win amount before the indicators signal the exit of a trade?

This sort of comment is not useful unless you post your results both backtest and forward traded. Ohters can then begin to see whether it might work for them. Using H4 crossovers you might expect 2 or 3 trades a month I expect which certainly could be more than enough

I did a back test a few months ago. it doesn’t work on longer charts. The trick with this system is:

  1. riding on the momentum to the nearest 00/50 (15 min just gives the right mix of distance that momentum will push)
  2. back stopped by trading with the longer trend.

I also backtested Cowabunga on 4H charts a while back. It didn’t work out for me either.

I used the exact same indicator settings as the 15m rules, I based the long term trend off the weekly chart, and I ignored the 00/50 levels and went for even 1:1 ratios. If you tweaked it you might get it to work, but with those rules it was a complete and utter failure. :slight_smile:

That’s bizarre. I have backtested this about a year on several currencies and it seems to almost always lead to large possible gains. I don’t know any fancy backtesting methods, only using meta trader manually. Can you let us know why it was an utter disaster Phil? For example, just take the EUR/USD since January and look at how many times it gives you huge gains vs how many times you end up losing (im waiting for RSI 50 cross or EMA cross to close on the losing side). I ignore the 50 and 00 rules as well, and don’t bother with a weekly trend. I dont have much of a take profit method but it almost always leads to big gains, and I did very well in a practice account the last few months with this. Anyone have any ideas?

I don’t remember exactly how bad it did or any of the finer details… It was so long ago and I didn’t save the results.

All I remember is that over a period of years it was unprofitable. But something as simple as ignoring weekly trends [I]could [/I]make a difference, so if your backtesting shows something different than mine then by all means go for it! :slight_smile:

I’d test it over at least 3-4 years though. In my opinion one year isn’t enough backtesting for a 4h system.

Hi Phil! May I know what software do you use to do backtesting?


i shall answer this question, and i suspect phil’s also using the same ‘software’:

The software is Homo sapien brain v1, and homo sapien eyes v1 (short sighted)…and lots of time spent pressing F12 on MT4…:smiley:

You got it!

Although in this situation if you have a little bit of programming skill you could probably modify the indicator on the following thread to work with 4H charts.

I don’t usually trust custom indicators (and never EA’s) if they are built just to backtesting something because of programming bugs and unforeseen problems the programmer didn’t take into account, but that indicator has been in use for over 2 years by a lot of people and has been proven trustworthy.

Thanks both of you!

Doing the same with great result.Been demotrading for 12 weeks now. Will start soon with some real $$$. Did lost big money in the pass so I am in to Learning, pipsology school, book, took a course to. etc… Put in around 2 hrs a day studing.

Yes; it does.

When you trade a multi-indicator system of this nature, it’s always going to be true that longer timeframes will give fewer trades but each of greater reliability (i.e. [B][U]if[/U][/B] it’s a sound system to start with, and that’s a very, very big “if”, then the win-rate will be higher, and the win-sizes will typically be of greater average magnitude).

This [U]doesn’t[/U] in itself [I]necessarily[/I] make doing so more profitable overall, of course (because of the reduced trading frequency: it can work out better gaining smaller amounts, even a lower proportion of the time, if the trading frequency is very significantly higher.)

I spent an enormous amount of time (quite a long time ago, now) methodically backtesting many different variations of the “Cowabunga system” and a huge number of indicator-variations of it, on a few of the “majors”. I know it may be almost sacreligious to mention it in this forum, but I was never convinced or able to demonstrate (and am still not) that it had a realistic edge [B]at all[/B], in [I][U]any[/U][/I] of its variations. The ways I found to make it profitable (though I don’t trade it) were [I]all[/I] based on incorporating price action techniques and principles into it. And that’s much harder to backtest, in practice.

The reason I don’t trade it, or anything similar to it, is that once one has learned to do that, one doesn’t actually need the indicators any more at all, and tends to be better off without them. Indirectly, the Cowabunga system was one of the underlying factors behind my abandoning indicators, and that decision itself was a big component in my eventually becoming profitable enough to make a living. So I ought to be very grateful to it, in a way. But that’s just my personal experience and perspective, and I know that many people here don’t share it. :8: