I really wish to delve into the reality of forex training and trading like yesterday. Feghadu Alazar July 12, at 7: Checkout Nial's Professional Trading Course here. As you read comments, you'll see that when traders asked me to recommend any particular strategies on this website, I did so. How does one keep their Forex trading simple?
As you can see, we have all the components of a good forex trading system. First, we’ve decided that this is a swing trading system, and that we will trade on a daily chart. Next, we use simple moving averages to help us identify a new trend as early as possible. The Stochastic help us determine.
The equity curve looks very similar to the one from the original article. Below the equity curve is the weekly drawdown as a percentage of equity.
Would anyone really trade this? The point is simple rules can be rather powerful and be the start of a great system. Can we take this trading concept and take it to a few more steps closer to a real system?
You can probably guess this would be my first line of attack. Often a simple indicator such as a simple moving average applied to a daily bar chart can be very effective in dividing a market into a bullish or bearish regime.
The idea in this case is to only take long trades when we are in a bull market. I will be using a simple moving average to act as my regime filter. We can clearly see there is a general trend of diminishing profit as you increase the length of the look-back period.
Values 30 and 40 appear to be outliers. I decided to choose the value Other values, such as 50, 60, 70, 80 and 90, will probably produce similar results. After applying the regime filter we get the following results:. So, does this look like an improvement? While we make less money, the system is more effective overall, in my opinion. The profit factor increases as does the average net profit per trade.
We also reduce the drawdown by a lot. I would guess we are eliminating a number of losing trades by only taking trades during a bull market. Another way to divide the market is through volatility. Markets go through periods of rising volatility and falling volatility.
In general, market volatility rises and peeks as the market falls and makes new lows. Some systems do well during these high volatility times while others do better during more quiet times. How are we going to measure volatility? Thus, we often see the VIX making new highs as the market is making new lows. Trade will only be opened when the current VIX is below the moving average. This should help the system by only taking trades when the VIX is likely to be falling.
But what value to use for the look-back? The results are depicted in the bar graph below where the net profit is on the y-axis and the look-back period is on the x-axis. The value 20 looked like a reasonable value to pick. The results of using 20 for the simple moving average for the VIX is below. Furthermore, like the regime filter we see an improvement in many of the performance indicators such as profit factor, average trade net profit and reduced drawdown.
Clearly, more work needs to be done. Just for curiosity I did run the VIX filter system up to the current date and the system continues to make new equity highs into May I use this example to ask a more general question?
You optmize a higher frequency component baseline system together with a lower freqency component, the MA based market filter. Default value is 40 pips. Finally, if you are enrolled in the Forex Robots course , then check out the new video I posted there. It explains exactly how the Trailing StopLoss works and how to use it to your advantage! First of all, as illustrated above, I have added a status display to the Expert Advisor.
Every day Simple System will update you on what happened at the designated hour. If a trade was successfully created — you will see this, but more importantly, if a trade was not created — you will be told why.
This will allow you to know right away that everything is going as planned, and your trade has not been set NOT because of an error, but rather because of a filter within the Trading Strategy. The second update is that I added a MarketExecution parameter.
You have to do this separately after the order has been created. In Simple System v6. As you can see from the image, I have added one new parameter — the Magic number. This is an identifier of your trades and allows you to use multiple expert advisors in the same terminal. The rest of the logic is the same. If you want to have more than 1 Simple System expert advisor running in a single MetaTrader 4 platform, then you need to use v5. This will allow each expert advisor to identify its own trades, therefore preventing them from interfering with each other.
Disregard the parameters specified in the image — you will have to find parameters your own parameters. For example, if the AutoHandle5Digits module is on then: The following messages are NOT errors of the EA, they are simply indicating why an order was not opened at the set time: Reason Order Not Opened: What this means is that throughout the life of any given order the following will happen:
K.I.S.S. ' Keep it Simple Stupid Forex Trading Method ' - The acronym K.I.S.S. stands for Keep It Simple Stupid. This acronym is as applicable to the field of Forex trading as it is to any. 'Keeping it simple' in regards to your Forex trading means keeping all aspects of your Forex trading simple, from the way you think about price movement to the . Download the Simple System Forex Robot, and learn how to perform backtesting, optimization and demo-testing in the MetaTrader 4 trading terminal. An Easy Day Trading Forex Strategy The best times to trade. Granted the forex markets are opened 24/5 but we want to trade when there is a good amount of volatility and these times are as follows. I will use Eastern Standard Time and you will have to translate it to your time where ever .