Hey everyone, I've just registered to post this. I love the simplicity of this strategy and the effectiveness. I've done a few modifications though and back tested it myself and the results are promising. Basic principles are the same as the OP. Moving average 30 ect.
My rules of entry though aren't exactly the same. I only enter on an engulfing candle only if it's the opposite color of the previous candle, for example enter on a bearish engulfing candle only if the previous was bullish and visa versa.
I draw my fibs from the highest/lowest point of the candle to the close and not the full candle as the close is my entry.
I enter upon the close of the 4H candle and also set a buy/sell limit on the 50% retracement for a second entry. The stop loss for both are 5 pips from the highest/lowest point of the candle.
Take profit for entry 2 (50% entry) is at the 150% level and take profit for entry 1 is at the 200% level though once price has closed at the 150% level and entry 2 has closed I move my SL to entry and close half of my position of entry 1 therefore I'm securing profits and limiting risk and extreme pullbacks.
I don't count pips as I only work with percentage. As the bullish engulfing candlestick pattern is considered one of the strongest I personally use high risk on the strategy. I risk 5% per entry so as you are when price moves to the 150% fib level I've closed and secured 7.5% return and let the remaining 2.5% hit target or be closed.
Any feedback or comments are welcomed and as always happy trading.
hi again. i have modify the EA with an RSI . the EA only buys if it is under the overbought limit and sells if it is above the oversold limit. i think is better for filtered the bad tradesmeinerEngulfTest 1.2.mq4
Hi everyone, so I started reading this thread, haven't gone through all the pages far from it, but still there's something that needs to be cleared up for me. As the rules are very simple and straightforward, I tested them in an EA that I made, and ran some backtests on different pairs. Always stuck to the H4 timeframe. Ran the tests for the past 5 years. And the results have been disastrous. I mean most of the time it's not even close.
Here are the results I got from 2015 - 2019:
EURUSD : +3%, with a -15% max DD
AUDUSD : -34.5%, with a -41% max DD
USDCHF : +8.2%, -13% max DD. The results were very inconsistent over the years (lots of big whipsaws in equity curve).
GBPUSD : +40%, -12.7% DD. Best result.
USDJPY : -31%, -38%DD.
USDCAD : -17.7%, -20.6%DD.
EURGBP : -18.5%, 25%DD. But has been loosing money since December 2017.
NZDJPY : +5.6%, 11% DD.
NZDUSD : -7%, -20%DD.
As you see, those results are pretty poor, especially for a 4.5 year period. So it makes me think 2 things:
- Either you guys haven't done some proper backtesting and think (rather, hope) that this is a winning strategy but will gradually lose money if applying it.
- There is more to the simple rules stated in the first post, and with other rules you end up filtering most of the losing trades.
So there you go, I'm not attacking anyone or trying to troll, but you have to admit the backtest results speak for themselves.
This system simply doesn´t work, easy as that. It´s the same like most other systems here. If you follow the rules, it will lose money, as your backtest shows already. The reason why this seems to be profitable here, is because traders only post their winning trades, so called cherry picking and thats the whole reason this "looks" profitable. None of these traders has shown a longer term live account for this strategy yet and that is because exactly that reason! If you ask them to do so, there is always excuses, like that they do not need to proof anything, blah blah blah... Really sorry to have no better news.
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