AUDUSD/AUDCHF/NZDJPY basket trading using 50 sma and 200 sma

Hi, I did a manual backtest on this system, it looks to be very successful although I only went back about 10 days. This is because my charts only went back 10 days on the 5 min chart.

I had an oppurtunity this morning and I took the trades so far so good.

There could be many versions of this It is not fully developed. I am open to ideas.

ok lets get started.

Time frame : 5min only (for the moment do not go higher or lower timframes this usuallly leads to confusion only)

Pairs: AUDUSD, AUDCHF, NZDJPY

Why these pairs you might ask. Simply these pairs are positively correlated from year all the way to 1hr.
We should check every week for correlation to see if any of the pairs are way out of correlation(this might be a way to trade that pair as a mean reversion)


Indicators: 50 sma , 200 sma

Lots: we enter 3 different lots per pair(it is up to the person to risk whatever they want, I divide my full buying power into 9. eg. $1000 x 50(leverage) =50000/9=5555 per entry.)

Entry:long(reverse for shorts): If any 2 of the 3 pairs have their 50 sma cross over 200 sma from bottom to up we enter a buy trade for all 3 pairs.
we should have 3 different entries long per pair. So total entries would be 9.

SL: Our hard stop loss for all entries will be 15 pips +spread.

TP: Our tp for 1 entry will be 20 pips;(at this point we will bring the remaining 2 entries to breakeven + spread)
One of the remaining 2 entries will have a Tp of 50 pips. But the other one we wil trail.
The one entry we wil trail by following the bottom of higher lows.(reverse is for shorts)
If at any time price touches the 200 sma or 50 sma crosses back over 200 sma the reamining 2 entries will be closed.

Here are the trades I took this morning:

Some of them still open some closed with profit already.

P.S. I'm thinking of 4 entries per pair, the fourth entry we will bring to breakeven after 20 pips like the rest and only exit when 50 sma crosses back 200 sma. Sometimes this leads to about 90 pips but more often the highest price goes before smas cross is around 50 pips.

Just took these trades 5 min ago.

The morning trades netted me 6%

I opened the trades 4 bars late.

I dont have a proper alert , I use oanda's price alert.

So if anyone can create an indicator that sends push notification when at least 2 pairs sma's cross over it would be very helpful.

tnx.

Ok for some weird reason the entry from mt4 happened much later than on Oanda's app. So im using Oanda's app entry from now on.

So I moved my stop losses based on Oanda's entries.

Thus far I already exited 3 trades with breakeven and 1 trade with 20 pip profit 2 trades with 14 pips

I know the rule is 20 pip exit but I used oandas calcualtion to exit. If I had entered with oanda's entry I would be out with 20 pips already on all 3 pairs.

The remaining 3 trades are all at breakeven + free trades.

im out of all trades, total gain from my secon set of trades is 2.96%
this is based on my style of entry i described in the beginning. I use my full potential buying power and divide in 9.
I would have gained more than 6% if I hadnt missed the early entry.

Where did you read the correlations?

Why the 5 minutes?

Too much hard work

the correlations are from oanda heatmap.
5 min gives out from 15 pips to 50 pips regularly after sma cross. this is good enough for me.
its only 2 to 3 trades a day. so all i need is a good alert system.

Since i cant use mt4 during the day I will use 1 trade per pair from now on and close 1 third at 20 pips and close the remaining as per my rules.

this thing is still in development so i will change as i please.
also im looking at an alternative way to trade this. if you look at my first trade audchf and audjpy both smas crossed down before nzdjpy' 50 sma was still above 200 sma. so im thinking just to trade nzdjpy for example. since it still has to cross down. this might be like mean reversion.

Getting ready to sell.

Audusd crossed, Audchf almost crossing

Why did you suddenly stop ?

I found signals to follow.

Please see private message

Why does almost every trader focus on the entry when the Exit is more important ?

Will try on 4h tf. Thanks and
Regards

stop loss and take profit are exits

[quote=hibra68;11637091]Entry:long(reverse for shorts): If any 2 of the 3 pairs have their 50 sma cross over 200 sma from bottom to up we enter a buy trade for all 3 pairs.
we should have 3 different entries long per pair. So total entries would be 9. tnx

Hello Dear....i want ask how would you enter 9 trades if you chose 3 paire i cannot understand about 9 entries

Hello again can you please elaborate this as will maybe there is some difficulty for me to understand this thanks in advance...

That is a too simple response to my question. I could think of 6 exit strategy's that could improve this strategy other than a simple exit at a cross back or a stop loss set to say 100 pips.
I start my strategy development backwards my looking for profitable exits on pairs first then try and match in with a nice entry system. For example an improvement to a cross over system is a double entry and multiple exit set to set small target profits based on ATR of the pair.
I spend 90% of my time backtesting exit plans on any strategy first.

What do you mean by double entry? Martingale?
If you mean martingale that is not just an exit strategy but a strategy all by itself. So you are in a different world with martingale.
Anyway Im trying double entry with round numbers now, just experimenting.
When it comes to exits in general you can use your imagination, but I personally think my correlation strategy is still good as long as the higher tf are still positively correlated.