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simplest strategy for GBP/ JPY

  • #21
  • Mar 27, 2007 4:52am Mar 27, 2007 4:52am
Quoting SisterCurare
250 pips a week on GBP/JPY is plausible, I think the daily ATR was a little over 300 for a while there. I don't think you'll be able to pull in 250 a week going forward as daily volatility returns to normal levels, especially with a MA system. At any rate, how would your settings (12/32 ema) be much different than standard MACD? Having said that, I do think the system will be profitable going forward, but not at a rate of 250 pips a week.
well the 100 PIP / month is an 8 month average
the worst performing months are september and october with 600 PIPs / month

and the best performing month is january with more than 300 PIPs

the maximum drawdown was in september (600 PIPs)
  • #22
  • Mar 27, 2007 4:55am Mar 27, 2007 4:55am
Quoting mrmikal
Another question...

I'm assuming during the start of an uptrend, the 12MA will go through the low, close and then high sequentially and vice versa for the start of a downtrend.

So the question is, if you start with 3-short positions and the trend starts to go long and the 12MA crosses above the 32-low MA that you would close one of the shorts and buy 1 lot (thus you would have 2 shorts and 1 long), however, if the price immediately reverses and the 12MA crosses back down that you would then close the buy you just made and open the short in the other direction. Right?
exactly. this thing helps alot against whipsaw market
  • #23
  • Mar 27, 2007 4:59am Mar 27, 2007 4:59am
[quote=brentmack;254650]
Quoting nicolas_nrjk
you'll have a total of 3 lots opened all the time.quote]

Nicolas -

It looks like a little discretion might be advisable for handling the crossovers.

If I'm seeing things correctly, it appears that you may be able to save more than a hundred pips from time to time by not riding out each move to the bitter end. Then just re-enter where you naturally should. Just a thought...

Of course, that's all very clear in hindsight!

Hopefully GBP/JPY will take a tumble pretty soon and we can test this out.

But I'll give you five-stars for an interesting technique.
if you insist on taking profits you can combine it with ideas from vegs trading method but you might miss the huge moves that makes the GBPJPY interesting to trade (one trade had 750 PIPS) so it's your choice.
  • #24
  • Mar 27, 2007 5:05am Mar 27, 2007 5:05am
Nicolas,

if there are two BUY trades each of 3lots, then next we get sell signal, we close previous 2buy trades and open one SELL trade with 3 lots ? is that rite ?
  • #25
  • Mar 27, 2007 5:25am Mar 27, 2007 5:25am
Quoting nicolas_nrjk
the worst performing months are september and october with 600 PIPs / month

and the best performing month is january with more than 300 PIPs
Nicolas -

If the worst months produced 600 pips, how many did you rack up in the best month? Thanks.
  • #26
  • Mar 27, 2007 10:09am Mar 27, 2007 10:09am
Quoting brentmack
Nicolas -

If the worst months produced 600 pips, how many did you rack up in the best month? Thanks.

january it made more than 3000 PIP. (sorry for the typo)
  • #27
  • Mar 27, 2007 10:31am Mar 27, 2007 10:31am
Nic,

I have used FX Solutions extensively and I can tell you that "Close and Reverse" (CAR as they like to call it) simply closes your open position at the appropriate side of the bid/ask and opens a new position at the same closing price:

- say you have a long...you CAR at 2.3000/2.3008
- The system first SELLS your BUY at 2.3008
- The system then SHORTS at 2.3008

So technically, you still paid the spread on both sides. I don't want anyone to be confused about that.

Quoting nicolas_nrjk
i use fxsolutions as a broker and they don't take spreads for "close and reverse operations
  • #28
  • Mar 27, 2007 10:48am Mar 27, 2007 10:48am
Nicolas,

if there are two BUY trades each of 3lots, then next we get sell signal, we close previous 2buy trades and open one SELL trade with 3 lots ? is that rite ?
  • #29
  • Mar 27, 2007 11:57am Mar 27, 2007 11:57am
I still say the bottom line with this or any Ma crossover system is that it will work when the market is trending and it'll be terrible when it's choppy-like now.

If you don't have a handle on when the market is likely to trend or not-you won't do well with trend following systems. Fundamentals are the only thing that set trends-not technicals. The GBP/JPY dropped over 1600 pips in the Feb 27 market correction and that didn't happen because the Ma's indicated a short position. It happened becasue the sell off created an aversion to risk. While that doesn't mean I don't use technicals-i also read a lot to get a feel for how markets may be thinking. No, i'm not always right, but i'll tell u this:

It's very likely that markets are choppy now because they're waiting for Bernanke tomorrow. If he makes some statements that indicate growth may not turn out as they see it-up towards the middle of the year and at or near long term potential (2.5-3%) for the year, those Ma's will indicate a long GBP/JPY position that could go very well because a trend likely will be set. S/R will get broken but S and R is there for the same reason sports records are there-to be broken.

And if the trend does get set-what will u use to know when the profit is maxed out? Wait for it to turn around into a short position? In a good trend, your profit will be drawn down by anywhere from 75-150 pips...and that would cost me alot of money...
  • #30
  • Mar 27, 2007 3:35pm Mar 27, 2007 3:35pm
Nicolas,

What strategies do you use for stops, tp, etc as there is no way to monitor the trades 24/7 and, if I understand the rules, it seems that you will always have a position?

Thanks
  • #31
  • Mar 27, 2007 3:41pm Mar 27, 2007 3:41pm
Quoting mrmikal
Nic,

I have used FX Solutions extensively and I can tell you that "Close and Reverse" (CAR as they like to call it) simply closes your open position at the appropriate side of the bid/ask and opens a new position at the same closing price:

- say you have a long...you CAR at 2.3000/2.3008
- The system first SELLS your BUY at 2.3008
- The system then SHORTS at 2.3008

So technically, you still paid the spread on both sides. I don't want anyone to be confused about that.
thanks for the informations. that was a point that i missed.
but since each month we have around 30 signals that makes us loose around 240 PIPs so subtract 240 from the average per month you'll have 760 PIPs/ month
  • #32
  • Mar 27, 2007 3:44pm Mar 27, 2007 3:44pm
Quoting wcalem
Nicolas,

What strategies do you use for stops, tp, etc as there is no way to monitor the trades 24/7 and, if I understand the rules, it seems that you will always have a position?

Thanks
unfotunatly like all trend following strategies you'll have to monitor your chart for 24h per day. i am now organising a team of traders to do that you might concider doing that too.
  • #33
  • Mar 27, 2007 3:53pm Mar 27, 2007 3:53pm
sounds intresting.
profitability makes a system stand in front
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #34
  • Mar 28, 2007 5:40am Mar 28, 2007 5:40am
I woke up (NY time) to some nice pips from yesterday's move.

The basic technique is awesome. I did set stops at 231.00 to safeguard some profit. We'll now see what happens from this point. It looks like there's room for another 80-90 pips if things go right.

Now that we've seen the good, we need a good whipsaw test to see the bad and the ugly.

Again thanks, Nicolas, for sharing this technique. It looks like there's plenty of room for personalizing this approach to fit each individual's goals and circumstances.
  • #35
  • Mar 28, 2007 7:53am Mar 28, 2007 7:53am
Quoting nicolas_nrjk
i wa just developping and testing a new strategy for the GBP/JPY pair. it is very simple but it requires patience and good money managment.
it has an average of 1000 PIP per month or a 33% return on investment per month.

on a 1 hour chart of GBP/JPY add a 12SMA and a 32 SMA high / 32 SMA low / 32 SMA close.

buy w lot when the 12 SMA crosses ezch of the 32SMA. close and reverse when the 12 SMA crosses back downward. you'll have a total of 3 lots opened all the time.

based on back testing and maximum drawdown calculations, i recommend that you buy 3 lots for each 3000$ in your account. use micro lots if your account is smaller that 3000$

PS: the close and reverse is great since it costs no spread

i'll soon post the testing results of the system.


Nicolas, thanks for posting your system. Which method for calculating 12 SMA do you use (high/low/close/median/etc.)?

Entered short last night at 231.75. One lot only unfortunately as I only caught 12 (calculated for close) cutting through the bottom 32. So far so good, though, +184 pips. Like others, can't wait to see what happens during whipsaws. If I get the results similar to yours than congratulations man - that would be one of the best methods I've tested

All the best
Money is merely a by-product of one's skills as a trader - M. Douglas
  • #36
  • Mar 28, 2007 8:05pm Mar 28, 2007 8:05pm
Have you guys tried using the MACD (12,26,9) with this? It's pretty useful when you're in a trade. For example-in a long position when the MACD crosses down, that's usually a pretty good time to get out. You can even try re-entering when the MACD crosses up again for some decent results.

It also seems to work to keep u in a position-let's say ur long again with some profit and price starts going against you. If you stay in as long as the MACD doesn't cross down-most times it keeps you in a position that continues in your favor.

Using the MACD seemed to work pretty well in the last short signal...if you would have exited after it crossed up-you would have been out before that big reversal. Let's see what happens if it crosses down again.

Also-the MACD seems to cross most of the times before the 12 starts crossing-good to use as an early warning system.

Nothing works 100%, but it's a help...
  • #37
  • Mar 28, 2007 8:43pm Mar 28, 2007 8:43pm
Can this strategy apply with GBP/USD?

It it can, we can get more signal and can make more trade
  • #38
  • Mar 28, 2007 9:53pm Mar 28, 2007 9:53pm
Quoting NewstraderFX
Have you guys tried using the MACD (12,26,9) with this?
Great idea!
  • #39
  • Mar 28, 2007 10:42pm Mar 28, 2007 10:42pm
Anybody trading this thing tonight?

Two SMA's have been crossed on the 1/2 hour charts. If we can penetrate this resistance level at 230.00 we could be off to the races.

It's got to go somewhere. It might as well go up!
  • #40
  • Mar 29, 2007 4:29am Mar 29, 2007 4:29am
maybe we can use CCI 14 as a filter
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