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Daily Candles backtesting

  • #1
  • First Post: Mar 10, 2007 3:30am Mar 10, 2007 3:30am
Hi all,

I have back tested GBP/USD over the last 18 months using just Daily Candles.

This method just seems too easy but struggles during a non trending market but overall is definitely profitable

Quite simply you set an order to buy or sell if the current daily price exceeds or drops below the previous days candle.. Thats it.

The stop initially is the low or high +/- 10 pips of the previous day however once the market has moved 40 + pips you bring stop to Break even (this is to protect during ranging days. not ideal... looking for a better filter if it exists)

The trailing stop is moved each day to the low or high +/- 10 pips.

You reverse the trade when the daily candle produces another signal.

Check the history of the daily charts. The only issue is maybe to use a good simple filter to help with the whipsaw.

Any comments or is any one trading this way?

Dave
  • #2
  • Mar 11, 2007 12:44pm Mar 11, 2007 12:44pm
Quoting rumbey
Hi all,

I have back tested GBP/USD over the last 18 months using just Daily Candles.

This method just seems too easy but struggles during a non trending market but overall is definitely profitable

Quite simply you set an order to buy or sell if the current daily price exceeds or drops below the previous days candle.. Thats it.

The stop initially is the low or high +/- 10 pips of the previous day however once the market has moved 40 + pips you bring stop to Break even (this is to protect during ranging days. not ideal... looking for a better filter if it exists)

The trailing stop is moved each day to the low or high +/- 10 pips.

You reverse the trade when the daily candle produces another signal.

Check the history of the daily charts. The only issue is maybe to use a good simple filter to help with the whipsaw.

Any comments or is any one trading this way?

Dave
Hi Rumbey

Could you please clarify your method... Do you mean on daily chart current candle should exceed or drop below the previous candle?

Thank you
Igor
  • #3
  • Mar 11, 2007 1:04pm Mar 11, 2007 1:04pm
Something just doesn't add up here. May I refer you to the Members lounge and the " PinHeads on PinBars" thread. No just joking

Quoting rumbey
Hi all,

I have back tested GBP/USD over the last 18 months using just Daily Candles.

This method just seems too easy but struggles during a non trending market but overall is definitely profitable

Quite simply you set an order to buy or sell if the current daily price exceeds or drops below the previous days candle.. Thats it.

The stop initially is the low or high +/- 10 pips of the previous day however once the market has moved 40 + pips you bring stop to Break even (this is to protect during ranging days. not ideal... looking for a better filter if it exists)

The trailing stop is moved each day to the low or high +/- 10 pips.

You reverse the trade when the daily candle produces another signal.

Check the history of the daily charts. The only issue is maybe to use a good simple filter to help with the whipsaw.

Any comments or is any one trading this way?

Dave
T
  • #4
  • Mar 11, 2007 1:57pm Mar 11, 2007 1:57pm
i think he's talking about SRDC
  • #5
  • Mar 11, 2007 2:42pm Mar 11, 2007 2:42pm
ye Igor, On the Daily chart as soon as the current days candle exceeds previous daily high you go long.

Conversely, should the current daily price drop below the previous days low you sell.

Just check the daily candles over say 2 years.

Any one else trading this?

Dave
  • #6
  • Mar 11, 2007 2:49pm Mar 11, 2007 2:49pm
Check out StevieT's "live trades" in the journal thread if you haven't. This is very similar.

http://www.forexfactory.com/showthread.php?t=10519
"Only when the tide goes out will we know who is swimming naked."
  • #7
  • Mar 14, 2007 10:05am Mar 14, 2007 10:05am
Quoting rumbey
Hi all,

I have back tested GBP/USD over the last 18 months using just Daily Candles.

This method just seems too easy but struggles during a non trending market but overall is definitely profitable

Quite simply you set an order to buy or sell if the current daily price exceeds or drops below the previous days candle.. Thats it.

The stop initially is the low or high +/- 10 pips of the previous day however once the market has moved 40 + pips you bring stop to Break even (this is to protect during ranging days. not ideal... looking for a better filter if it exists)

The trailing stop is moved each day to the low or high +/- 10 pips.

You reverse the trade when the daily candle produces another signal.

Check the history of the daily charts. The only issue is maybe to use a good simple filter to help with the whipsaw.

Any comments or is any one trading this way?

Dave

Why you posting this on Mouteki thread? Rhetorical question. You should start your own thread.
  • #8
  • Mar 14, 2007 11:24am Mar 14, 2007 11:24am
Rumbey,

OK, I did some WLD back testing on this for about 5 different pairs over 1-5, 10 and 20 year periods.

Over the course of 10 and 20 years, this system didn't do so hot. The Winning % was very low...however, I didn't try trailing the stop by 10 pips as mentioned.

Instead I just followed pretty simple rules:
- If the price gaps above the high or below the low do nothing.
- Buy at the High of the previous day...if the price exceeds a threshold (40 pips for the GBP/JPY, GBP/USD, 20 pips for the EUR/USD, USD/JPY and USD/CHF), then set stop at break-even.
- Sell at the Close or the stop which ever was higher
- do the inverse for the shorts.

You'll be happy to know that this system is profitable...but NOT 6000 pips a year profitable.

Over 20 years, I was able to accumulate 42,000 pips for the GBP/USD.

There were some down years (9 years ago was the last time).

Now, there are some nuiances that we may be missing, so this may not be as profitable as this seems...especially if there were any 40 pips swings from the high and the open (meaning the price shoots up above the threshold, but comes back down to break-even only to go back up again. I'm sure this happened on a few occasions, but how many and to what effect that had, I don't know.

The daily candles I had were based in GMT (I think). I did not try to exclude any days (like Sunday).

Quoting rumbey
Hi all,

I have back tested GBP/USD over the last 18 months using just Daily Candles.

This method just seems too easy but struggles during a non trending market but overall is definitely profitable

Quite simply you set an order to buy or sell if the current daily price exceeds or drops below the previous days candle.. Thats it.

The stop initially is the low or high +/- 10 pips of the previous day however once the market has moved 40 + pips you bring stop to Break even (this is to protect during ranging days. not ideal... looking for a better filter if it exists)

The trailing stop is moved each day to the low or high +/- 10 pips.

You reverse the trade when the daily candle produces another signal.

Check the history of the daily charts. The only issue is maybe to use a good simple filter to help with the whipsaw.

Any comments or is any one trading this way?

Dave
  • #9
  • Apr 28, 2007 11:28am Apr 28, 2007 11:28am
also I commerce with daily candles and join spread to + 5 points in on or in giu' example:
gpb/usd 1,9974 on, then 1,9974+4+5= 1,9983 long
gpb7usd 1,9955 giu' then 1,9955-4-5= 1,9946 short
hello eagle
  • #10
  • May 3, 2007 3:05am May 3, 2007 3:05am
Quoting rumbey
Hi all,

I have back tested GBP/USD over the last 18 months using just Daily Candles.

This method just seems too easy but struggles during a non trending market but overall is definitely profitable

Quite simply you set an order to buy or sell if the current daily price exceeds or drops below the previous days candle.. Thats it.

The stop initially is the low or high +/- 10 pips of the previous day however once the market has moved 40 + pips you bring stop to Break even (this is to protect during ranging days. not ideal... looking for a better filter if it exists)

The trailing stop is moved each day to the low or high +/- 10 pips.

You reverse the trade when the daily candle produces another signal.

Check the history of the daily charts. The only issue is maybe to use a good simple filter to help with the whipsaw.

Any comments or is any one trading this way?

Dave
I've been trading like this for a long time. for filter use price action (bars like measuring bar, outside bar, avoid small bars, etc). I have guys that trade with this one blindly with TS 20-40 depending on a pair and do ok.
  • #11
  • May 14, 2007 1:30pm May 14, 2007 1:30pm
Quoting mkoturic
I've been trading like this for a long time. for filter use price action (bars like measuring bar, outside bar, avoid small bars, etc). I have guys that trade with this one blindly with TS 20-40 depending on a pair and do ok.
I picked up this PAIN indicator (Price action indicator) from a post made by tesla. Maybe it can help here. I am not sure how but maybe you have some ideas.
Attached File(s)
File Type: mq4 PAIN.mq4   < 1 KB | 868 downloads
Could it be Man is trying to be something without knowing they're complete?
  • #12
  • Last Post: May 14, 2007 2:04pm May 14, 2007 2:04pm
  •  tesla
  • Joined Oct 2006 | Status: Friendly Neighborhood Programmer | 533 Posts
Quoting Numb3rs
I picked up this PAIN indicator (Price action indicator) from a post made by tesla. Maybe it can help here. I am not sure how but maybe you have some ideas.
Just a quick note regarding that indicator... I don't use it and have pretty much forgotten about it. I coded it up as a favor to another board member since it was pretty easy to do. It might be the best thing since sliced bread or it could be totally worthless, I have no idea.
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