In my continual search for a simple profitable system that I can trade using 30 mins a day, I manually backtested a very simple system on the EUR/USD daily chart.
If price closes above a 22 period Moving Average buy at open, if price closes below 22 period Moving Average sell at open. You are in the market at all times.
Testing this manually for 2010 it appeared magical.
I then downloaded daily price history from 1999 to see if it always does this well. Big surprise and disappointment….
The graph shows cumulative pips lost /won, see the massive gains since 2009.
Total trades : 371
Win % : 22.4%
Avg pips won : 302 pips
Avg pips lost : 82 pips
Total pips won : 1825 pips
Just thought I'd share the test to illustrate that a system may appear magical over a 1 or 2 year period but is actually not a great system at all.
If price closes above a 22 period Moving Average buy at open, if price closes below 22 period Moving Average sell at open. You are in the market at all times.
Testing this manually for 2010 it appeared magical.
I then downloaded daily price history from 1999 to see if it always does this well. Big surprise and disappointment….
The graph shows cumulative pips lost /won, see the massive gains since 2009.
Total trades : 371
Win % : 22.4%
Avg pips won : 302 pips
Avg pips lost : 82 pips
Total pips won : 1825 pips
Just thought I'd share the test to illustrate that a system may appear magical over a 1 or 2 year period but is actually not a great system at all.