A Proven Simple Strategy (2MAs, 1 RSI) 8 Attachment(s) Hello everyone, Its been a while since I have posted but I wanted to share a super simple system that has been proven profitable. I hope this will help some of you here on FF. I did not create this strategy and it is nothing new. Its often overlooked because it's so simple but often times the simplest strategies can be the best. I have modified the original trading rules a little bit to rules that fit my trading style a little better. DISCLAIMER: THIS IS NO GRAIL. I AM NOT CLAIMING THIS TO BE A HOLY GRAIL. THIS IS JUST A SYSTEM THAT WORKS, THAT IS ALL. Things To Keep in Mind: 1. This is intended to be traded on Daily Charts. I will also post the results for other timeframes towards the bottom of the post(coming soon). 2. There is no Hard SL or TP to this system. I have not found any configurations using ATR or similar tools to place an SL & TP that improved the system. As a result I do not use one with this system and just following the signals. 3. This system is not perfect. As with all systems, it performs better on certain pairs during certain conditions. What really allows you to take advantage of the system and avoid this variance is diversifying the instruments you trade it on!!! 4. Test results used a fixed lot size that does not increase. 5. Tests were performed on 7 major USD pairs(EU, GU, AU, NU, UJ, UCHF, UCAD). Thread Rules: 1. Do not add additional indicators. You may adjust current indicator settings and share your results if you'd like. 2. If you are going to suggest changes to the system, please provide hard evidence to support why these changes are profitable or better. 3. Keep it friendly. Please no spam. 4. Again no one likes conjecture. Do not make statements or claims about this system or any other system in here if you do not provide proof for the claims you are making. 5. Have fun & keep learning! Entry Rules: Long: 1. Price is above 200 MA. 2. Price is below 5 MA. 3. RSI(2) is below 5. Short: 1. Price is below 200 MA. 2. Price is above 5 MA. 3. RSI(2) is above 95. Exit Rules: Option 1(This option is for people who just want to check the chart at the end of the day, This is the Option used in results below): Exit at the close of the candle that touches the 5 ma. Option 2(This is a better option for people who want to watch their trades like a hawk): Exit as soon as price touches 5 ma. So as they say, the proof is in the pudding. Well, here is my pudding, along with some other peoples pudding. The Pudding: In House Pudding: The first batch of pudding I will show you is my batch. Although there are other studies done about this system which I will share below, it is always smart to test the system for yourself before you even think about using it. EURUSD Daily Jan 2010  Dec 2015  Fixed .10 Lots  Spread = Current(Tests ran during NY Session) Summary: P/L: 290.00 Profit Factor: 1.10 Expected Payoff: 3.92 Max DD: 8.35% GBPUSD Daily Jan 2010  Dec 2015  Fixed .10 Lots  Spread = Current(Tests ran during NY Session) Summary: P/L: 923.80 Profit Factor: 1.31 Expected Payoff: 9.15 Max DD: 6.71% AUDUSD Daily Jan 2010  Dec 2015  Fixed .10 Lots  Spread = Current(Tests ran during NY Session) Summary: P/L: 459.10 Profit Factor: 1.20 Expected Payoff: 5.28 Max DD: 8.62% NZDUSD Daily Jan 2010  Dec 2015  Fixed .10 Lots  Spread = Current(Tests ran during NY Session) Summary: P/L: (132.70) Profit Factor: 0.95 Expected Payoff: (1.37) Max DD: 4.23% USDJPY Daily Jan 2010  Dec 2015  Fixed .10 Lots  Spread = Current(Tests ran during NY Session) Summary: P/L: 2200.83 Profit Factor: 2.57 Expected Payoff: 21.57 Max DD: 2.63% USDCHF Daily Jan 2010  Dec 2015  Fixed .10 Lots  Spread = Current(Tests ran during NY Session) Summary: P/L: 61.42 Profit Factor: 1.02 Expected Payoff: 0.65 Max DD: 6.86% USDCAD Daily Jan 2010  Dec 2015  Fixed .10 Lots  Spread = Current(Tests ran during NY Session) Summary: P/L: 80.29 Profit Factor: 1.04 Expected Payoff: 0.80 Max DD: 5.90% OVERALL RESULTS P/L: 3882.74(38.82%) Avg Profit Factor: 1.31 Avg Expected Payoff: 5.71 Avg MAX DD: 6.19% Summary: Overall this system performed quite well over the last 5 years. As I mentioned above it is key to diversify when using this strategy or others like it because some pairs will perform others as market conditions change. Diversifying will combat this variance as shown in the results above. Out Sourced Pudding: RSI2 Strategy Results.pdf Summary: As you can also see from these results, diversifying really helps this system by reducing the natural variance that will occur between individual pair performance. 
Trade daily TF no need to use any indicator, just the candlestick enough, simple and powerful. just suggestion. 
OVERALL RESULTS P/L: 3882.74(38.82%) Avg Profit Factor: 1.31 Avg Expected Payoff: 5.71 Avg MAX DD: 6.19% Duration : 6 years 39% / 6 = 6.50% annual deposit your money to a bank, safer 
Thank you for sharing this system. This is my understanding of the system as introduced:
The concept is good. 
'OVERALL RESULTS P/L: 3882.74(38.82%)' Initial Bank 70,000 (7 X 10,000) Profit 3882.74 (5.54%) Over 6 years = 0.92%/annum I'd find another hobby if I were you. 
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1 Attachment(s) This is a quick EA to test the system. I've added few options, but the default settings are as per Sis.yphus rules. TwoMA_OneRSI.ex4 
Dear all, simple systems can be the most profitable. Abo, thanks for the EA. Would be interesting to see the results. Perhaps test the EA with a fixed SL/TP (TP being > than SL)? cheers 
Also please show me a bank(U.S.) with 6% interests rate and I will quit investing all together, stick my savings in their and never work again....
With the lot sized used in the test you can trade all 7 pairs at the same time and not run into margin issues. In other words the same 10,000K can easily trade all 7 pairs at .1 lot size.
2. There is no Hard SL or TP to this system. I have not found any configurations using ATR or similar tools to place an SL & TP that improved the system. As a result I do not use one with this system and just following the signals. Also if that blue line is the 200 MA the trade you marked is invalid as price needs to close ABOVE the 200 and BELOW the 5. In the pic it is closing below both MAs. 
Again, I like where you are going! Any other thoughts rgding SL's and TP's?? 
I personally have not found an SL that provides better results than not using one. And even with not using an SL the drawdown is still extremely low pair to pair. I do think a good one could be implemented as maybe a hard stop but then again the 5 MA catches up to the price very quickly. I am very interested in seeing what you find when using the SL. I am going to play around with the EA you posted and will share the results I find.
As I mentioned to Khalil, I have not found any useful SL that works and I think it is crucial that the TP the is exiting on the touch of the 5 min MA. Here are some statistics on SL(based on pip size and market spread & TP, so they do not directly apply to this strategy but they illustrate a point) that show the statistical disadvantages you face if you make them too small. This was posted on one of my old threads and it assumes the spread is .4(which most peoples is much higher so these numbers are much worse) Assuming Spread is .2 (5 Pip Target for 1:1) 1:.25 = 11 Pips For 5 Pips = 4 Pip Pay Out or 12 Pip Loss After Commissions/Spread. True R:R 1:.45  6% Win Rate Needed To Make Up. 1:.5 = 7 Pips For 5 Pips = 4 Pip Pay Out or 8 Pip Loss After Commission/Spread.  True R:R 1:.71  8% Win Rate Needed To Make Up. 1:1 = 3 Pips For 5 Pips = 4 Pip Pay Out or 4 Pip Loss After Commission/Spread.  True R:R 1:1.66  13% Win Rate Needed To Make Up. 1:2 = 3 Pips For 9 Pips = 8 Pip Pay Out or 4 Pip Loss After Commission/Spread.  True R:R 1:3  8% Win Rate Needed To Make Up. 1:3 = 3 Pips For 13 Pips = 12 Pip Pay Out or 4 Pip Loss After Commissions/Spread.  True R:R 1:4.25  6% Win Rate Needed To Make Up. 1:4 = 3 Pips For 17 Pips = 16 Pip Pay Out or 4 Pip Loss After Commissions/Spread.  True R:R 1:5.66  6% Win Rate Needed To Make Up. 1:5 = 3 Pips For 21 Pips = 20 Pip Pay Out or 4 Pip Loss After Commissions/Spread.  True R:R 1:7  5% Win Rate Needed To Make Up. (10 Pip Target for 1:1) 1:1 = 8 Pips For 10 Pips = 9 Pip Pay Out or 9 Pip Loss After Commissions/Spread.  True R:R 1:1.25  6% Win Rate Needed To Make Up. 1:2 = 8 Pips For 19 Pips = 18 Pip Pay Out or 9 Pip Loss After Commissions/Spread.  True R:R 1:2.37  4% Win Rate Needed To Make Up. 1:3 = 8 Pips For 28 Pips = 27 Pip Pay Out or 9 Pip Loss After Commissions/Spread.  True R:R 1:3.5  4% Win Rate Needed To Make Up. 1:4 = 8 Pips for 37 Pips = 36 Pip Pay Out or 9 Pip Loss After Commissions/Spread.  True R:R 1:4.63  3% Win Rate Needed To Make Up. 1:5 = 8 Pips for 46 Pips = 45 Pip Pay Out or 9 Pip Loss After Commissions/Spread.  True R:R 1:5.8  3% Win Rate Needed To Make Up (20 Pip Target for 1:1) 1:1 = 18 Pips For 20 Pips = 19 Pip Pay Out or 19 Pip Loss After Commissions/Spread.  True R:R 1:1.11  3% Win Rate Needed To Make Up. 1:2 = 18 Pips For 39 Pips = 38 Pip Pay Out or 19 Pip Loss After Commissions/Spread.  True R:R 1:2.17  2% Win Rate Needed To Make Up. 1:3 = 18 Pips For 58 Pips = 57 Pip Pay Out or 19 Pip Loss After Commissions/Spread.  True R:R 1:3.22  2% Win Rate Needed To Make Up. 1:4 = 18 Pips For 77 Pips = 76 Pip Pay Out or 19 Pip Loss After Commissions/Spread.  True R:R 1:4.28  2% Win Rate Needed To Make Up. 1:5 = 18 Pips For 96 Pips = 95 Pip Pay Out or 19 Pip Loss After Commissions/Spread.  True R:R 1:5.33  2% Win Rate Needed To Make Up. Assuming Spread is .4 (5 Pip Target for 1:1) 1:1 = 2.6 Pips For 5 Pips = 3.8 Pips Pay Out or 3.8 Pips Loss After Commission/Spread.  True R:R 1:1.92  17% Win Rate Needed To Make Up. 1:2 = 2.6 Pips For 8.8 Pips = 7.6 Pips Pay Out or 3.8 Pips Loss After Commission/Spread.  True R:R 1:3.38  11% Win Rate Needed To Make Up 1:3 = 2.6 Pips For 12.6 Pips = 11.4 Pips Pay Out or 3.8 Pip Loss After Commissions/Spread.  True R:R 1:4.85  10% Win Rate Needed To Make Up. 1:4 = 2.6 Pips For 16.4 Pips = 15.2 Pips Pay Out or 3.8 Pip Loss After Commissions/Spread.  True R:R 1:6.3  8% Win Rate Needed To Make Up. 1:5 = 2.6 Pips For 20.2 Pips = 19 Pips Pay Out or 3.8 Pip Loss After Commissions/Spread.  True R:R 1:7.77  6% Win Rate Needed To Make Up. (10 Pip Target for 1:1) 1:1 = 7.6 Pips For 10 Pips = 8.8 Pip Pay Out or 8.8 Pip Loss After Commissions/Spread.  True R:R 1:1.32  8% Win Rate Needed To Make Up. 1:2 = 7.6 Pips For 18.8 Pips = 17.6 Pip Pay Out or 8.8 Pip Loss After Commissions/Spread.  True R:R 1:2.56  6% Win Rate Needed To Make Up. 1:3 = 7.6 Pips For 27.6 Pips = 26.4 Pip Pay Out or 8.8 Pip Loss After Commissions/Spread.  True R:R 1:3.63  5% Win Rate Needed To Make Up. 1:4 = 7.6 Pips For 36.4 Pips = 35.2 Pip Pay Out or 8.8 Pip Loss After Commissions/Spread.  True R:R 1:4.79  4% Win Rate Needed To Make Up. 1:5 = 7.6 Pips For 45.2 Pips = 44 Pip Pay Out or 8.8 Pip Loss After Commissions/Spread.  True R:R 1:5.95  4% Win Rate Needed To Make Up. As you can see by doubling the spread, the win rate needed to make up almost triples. So if you traded with a spread of 2 and a 10 pip stop on a daily chart, you are basically putting yourself at a minimum 20%+ disadvantage(in other words your winrate needs to be extremely high to trade a 10 pip stop system, especially on a daily chart). Again, these numbers are based on pip size and market spread & TP, so they do not directly apply to this strategy but they illustrate the point I am trying to make anyways hope it makes sense. 
1 Attachment(s) FOR ALL THE LEVERAGE JUNKIES I have noticed a lot of people complaining about the returns demonstrated using extremely low leverage and risk... Well since most people on FF are looking to get rich quick or go busto trying, here are the results using super high leverage(I DO NOT RECOMMEND YOU TRADE LIKE THIS) and compounding the lot size based on the account size. USDJPY  6 Years(20102015)  Spread = 2 Pips  Super Leveraged Trading with compounding lot size. 
I'll see if I can mess around with the EA and see what I can come up with... 

I am getting a sell sign on both EUR/USD and Gold. I like both of those signals and by using my suggested SL's, I would set them here: EURUSD: 1.09945 Gold: 1098.26 I'll wait for spreads to thin out and take the trade a few hours after the open. 
I would recommend testing the strategy using your SL and TP idea and then reporting back the results. I may check it out and test it my self a little later today if I have time. 
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Sidenote, you are def on to something, see attachment... 
Sidenote: Haha thanks. The funny thing is though this thread will likely not get popular at all because it actually works but does not work good enough for most traders. Which then leads to the typical system hoping trader as they always are searching for something "better". These markets are already extremely brutal so sometimes it pays to just be good enough... 
At the end of the day, if you expect, aim for or truely believe that you can make anything more than 10% a month you will not survive long. I'll take 6% YTD with low risk any day! I'll try to keep this thread alive and if it does die out just PM me, maybe we can work things out by ourselves. Let those dreamers dream and watch them feed the market. 
Indeed This is because most traders don't have the large capital to see the magic in this. So the hunt goes on... 
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Hard to believe that only 3572 trades were placed during 5 years... I'd expect at least 10 trades aday,or did you limit the EA to certain trading hours?? *EDIT; my bad, i forgot about the RSI indy... 
My broker won't let me access data older than December 2015 (right now). Could someone run the EA on the EURCHF dated back to 2010? I'd love to see how it performed during the SNB's fieldday... 
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Am I reading those settings correctly? SMA 20 EMA 5 RSI 2  70/30 ?? 
Hi Sis... You're wrong, the trade mark is valid Price close< ema5, and > ema200 Good luck 
yes 

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Very nice results, the following pairs are setting up for entries: AUDUSD EURAUD USDCAD GBPUSD EURGBP EURUSD Just a quick heads up for those looking to jump in. 

So, to trade this system, do we need at least $10,000, or could we use micro lots if we have less? 

Thanks for the EA. Can you add Money Management? 
Is you entry based on close above/below 5MA or on the cross? 

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