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simplest strategy for GBP/ JPY

  • #61
  • Mar 30, 2007 5:25pm Mar 30, 2007 5:25pm
Today was an insane time to trade-you gotta think about all these reports comin out and the potential for mixed signals. With multiple reports-odds are that they will conflict-creating soem wild whipsaws. And if you get caught the wrong way in a fast market-u may have problems closing-as we all know.
  • #62
  • Mar 30, 2007 5:33pm Mar 30, 2007 5:33pm
first of all i would like to thank you guys for all the ideas around my strategy.

and since march have ended i would like to post the results in PIPs on my strategy. 2978 PIPs for the month of march. pretty impressive

good luck for you all for the next month.
  • #63
  • Mar 30, 2007 5:44pm Mar 30, 2007 5:44pm
I just saw this thread I will study it over the weekend. Thanks for your time and effort in sharing GB
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.
  • #64
  • Mar 30, 2007 5:50pm Mar 30, 2007 5:50pm
Quoting wookashc
hey lwojtow,

can you tell us what exactly was it that you were backtesting? was it the original nicolas' 12/32 method or newstradersfx' macd/price action version?

i too think that in order to make decent pips with this method one has to apply some sort of exit rules. i though of exiting in stages, say close the first unit after 80-100 pips into the trade, the second one after 160-200 pips and let the third one run until the sweet or bitter end (til 12 crosses the 32s again), whatever the pip result. this may cut some profits during long trends, but again helps to survive whipsaws, hopefully making one more or less break even during those times. the above numbers are the result of eyeball analysis only - they can be different in reality. i'll try to do a better research when i've more time on my hands - life's too hectic right now.

again, thanks nicolas for showing you ideas it to us. the three 32 SMAs concept is really worth investigating and i probably woudn't look at GBP/JPY and other cross pairs if not your thread (12-14 pip spread on this particular pair with my broker). some of them look much easier to trade than the main pairs - maybe the grail's buried here somewhere?

have a good day everyone
I backtested original rules as stated in post #1. I like this strategy a lot and on backtest last few months were excellent. Unfortunatelly, it wasn't working for last 5 years, so I'm not hoping it will suddenly start working now. If only we could come up with some sort of filter to create neutral zone (not a stop and reverse system) then result could be very cute.

Good luck,
Lw
  • #65
  • Mar 30, 2007 6:26pm Mar 30, 2007 6:26pm
okay, i've spent my evening (i live in GMT+1) on backtesting of the system and IMHO a good exit strategy is a must. i've manually done 200 transactions between jan and mid-may 2006 (ran out of steam) and the net result was just 164 pips (!!!) as much as i wanted them to, the 3x32 SMA unfortunately didn't do any better in rangebound periods than just one MA the worst month was march (-1875 pips), which is terrible compared to min 600 pips as achieved by nicolas. i haven't checked the following months yet, but taking mine and lwojtow's results into consideration, i'd be careful with applying the strategy in its pure form. i think it should be modified for long term successful trading.

for those of you who are interested, i'm attaching the trade record. my broker's 13 pip spread has been included in every transaction, meaning that 13 pips were added to the bid price when entering long and when closing short. position reversal has been coded with colours. for example, the first transaction was a buy at 203,01, which was then closed and reversed at 202,82. the short side of this trade is in line 5 of the spreadsheet as a sale at 202,82. both of them are highlighted in yellow. same goes for other trades.

i'll share further results after i do some more backtesting.

anyway, keep the ideas coming!
Attached File(s)
File Type: zip RESULTS.zip   8 KB | 975 downloads
Money is merely a by-product of one's skills as a trader - M. Douglas
  • #66
  • Mar 30, 2007 8:39pm Mar 30, 2007 8:39pm
Quoting gagiul
Did u guys get the same sell signals as me? or am I wrong...
I didn't trade today with it being Friday on the last day of the month and some FA's coming out.

I've learned to enjoy those "extra" days off that Forex can offer you.
  • #67
  • Mar 30, 2007 11:40pm Mar 30, 2007 11:40pm
Quoting Chartist
After some thought, I came up with what I think may be a good system to use with yours. Call it an "Insurance Position", which you can open apart from the other 3 positions as the 12 crosses the 32's, and you are incorporating price action to help with whipsaws and to also get you in early, but with high probability.
Hi Chartist:

So the first of (4) trades would be like a "test pilot" getting in early based on the price action and then the SMA's crossings kick in?

If that's what you're saying and illustrating with the charts - I'll check it out this weekend. But the idea sounds hot!

Thanks...
  • #68
  • Mar 31, 2007 12:08am Mar 31, 2007 12:08am
Quoting nicolas_nrjk
first of all i would like to thank you guys for all the ideas around my strategy.

and since march have ended i would like to post the results in PIPs on my strategy. 2978 PIPs for the month of march. pretty impressive

good luck for you all for the next month.
Nicholas -

That's ridiculous!

We've got a new month to work with. Here's to 600 or better...

Since some us may be trying some minor variations, hopefully you'll check in and give us an update on how you're doing from time to time.
  • #69
  • Mar 31, 2007 8:12am Mar 31, 2007 8:12am
Quoting brentmack
I didn't trade today with it being Friday on the last day of the month and some FA's coming out.

I've learned to enjoy those "extra" days off that Forex can offer you.
Also the end of the quarter. I'll never again have trades open on the last day of the quarter. That just went onto my checklist.
  • #70
  • Apr 2, 2007 3:51am Apr 2, 2007 3:51am
Quoting brentmack
Hi Chartist:

So the first of (4) trades would be like a "test pilot" getting in early based on the price action and then the SMA's crossings kick in?

If that's what you're saying and illustrating with the charts - I'll check it out this weekend. But the idea sounds hot!

Thanks...
Check out my post, as soon as price closes down below ONE of the 32's, then you open up a test pilot position (I like that name : ) You don't necesarily open one up with the cross of price of each 32, although this test pilot position could be of equal value of the sum of the 3 ma cross positions.

Price doesn't always close accross ma's perfectly. I don't know if anyone can test this out as a filter, but if you look at the last week, it would have saved some major pips!
  • #71
  • Apr 2, 2007 3:55am Apr 2, 2007 3:55am
Quoting blueruby
Also the end of the quarter. I'll never again have trades open on the last day of the quarter. That just went onto my checklist.
Lastweek was a doji week for most currencies, very choppy, but that just means the market is setting up for some big moves after a consolidation week!
  • #72
  • Apr 3, 2007 6:11am Apr 3, 2007 6:11am
I haven't been in with this method yet this week. I prefer an opportunity for all three of the SMA's to get crossed.

If we're patient, we'll get a shot at some major pips some day soon. It only takes a couple of days of the right price action to make a good month.

It looks like this thread is being largely ignored. But we'll show em!
  • #73
  • Apr 3, 2007 6:19am Apr 3, 2007 6:19am
I highly doubt the success of this method. It's just a MA Crossover system. Therefore, it has the usual downsides. Don't just trust other people's backtesting results do your own papertrading or backtest an EA which emploeys this strategy (don't test only in trending but also in choppy, sideway markets!)
  • #74
  • Apr 3, 2007 6:57am Apr 3, 2007 6:57am
[quote=tradeigel;261322]Don't just trust other people's backtesting results...quote]

Agreed. Backtesting is one of the most over-hyped and least understood tools in all of Forex.

It cracks me up when that's one of the first things that people ask for.
  • #75
  • Apr 4, 2007 1:01pm Apr 4, 2007 1:01pm
Quoting tradeigel
I highly doubt the success of this method. It's just a MA Crossover system. Therefore, it has the usual downsides. Don't just trust other people's backtesting results do your own papertrading or backtest an EA which emploeys this strategy (don't test only in trending but also in choppy, sideway markets!)
I grabbed approx. 135 pips on Monday, granite, I also use price action to confirm, if you would have followed this system to the letter, the results would have been similar.... but I agree that you shouldn't trust other people's backtesting. You should do your own.
  • #76
  • Apr 6, 2007 12:47am Apr 6, 2007 12:47am
wookashc and lwojtow

thanks for backtesting and posting reults, this system definitly needs filter
  • #77
  • Apr 10, 2007 3:56am Apr 10, 2007 3:56am

looks like we got a few whips lately on this strategy. I avoided some of them by looking at the angle of the 12 sma...but it doesnt help much. anyone has a better filter for momentum?

We leave no soldier behind.
  • #78
  • Apr 11, 2007 4:54am Apr 11, 2007 4:54am
i think i got same problem with u...
for now i get -200 for GJ..
anyone can suggest me the best SL for this SL?
TQ
  • #79
  • Apr 11, 2007 5:05am Apr 11, 2007 5:05am
hi all,

I would suggest for those who trading on this pair MUST BE EXTRA CAREFUL. This pair is the most volatite pair among all the currency pairs. Even with a minor retracement, it will blows up your account. Unless a very systematic or high accuracy trading system developed, don ever touch on this pair. For my opinion, the system based on MA cross wasn't good enough and many whips can occurs. So just be careful during trading
  • #80
  • Apr 11, 2007 12:50pm Apr 11, 2007 12:50pm
Quoting comeinvest
hi all,

I would suggest for those who trading on this pair MUST BE EXTRA CAREFUL. This pair is the most volatite pair among all the currency pairs. Even with a minor retracement, it will blows up your account. Unless a very systematic or high accuracy trading system developed, don ever touch on this pair. For my opinion, the system based on MA cross wasn't good enough and many whips can occurs. So just be careful during trading
You are partly right, but it doesnt mean that we have to run away from this pair. Actually there are a few systems here which work very well, including this one. Except whipsaws, GY can bring u some very large profits, using this strategy. We just need to refine its enter/exit rules. Hope to see more input from the owner of this strategy and others...im testing as well.
We leave no soldier behind.
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