Strategy with good average monthly profit per year

Hi everyone,

So after a while, I came up with an strategy that I build myself. I realised after trying many trading methods, that the best and safely way, is to trading on daily charts, since is the one with the strongest information, and is not that slow as weekly or monthly charts.

I manually tested this strategy with several currencies like EURUSD, AUDCAD, USDCAD, USDJPY and GBPUSD from 2010 to 2016 and in all of them, gave me good results, but the best was on EURUSD.

The strategy is just based on indicators, I don't use trading news at all. I use the following indicators:

- Ichimoku (just the chikou span at 26 periods, I delete the rest of the information)
- Eiken Ashi smoothed.
- Eiken Ashi.
- CCI (14).
- MACD (12,26,9).
- Stochastic (5,3,3).


The default SL is 150 pips for any entry. I'm getting 5% risk, meaning, if I have an account of 10K USD, I will make the position to lose maximum 500 USD per position.


These are the rules for a long entry:

1. Chikou span on top of the price.
2. Heiken Ashi smoothed on blue color (2 consecutives candles at least).
3. Heiken Ashi (the regular one) in white color (2 consecutives candles at least).
4. CCI in bullish trend (going up) within 90 and 45 degrees.
5. MACD either entering the bullish trend or leaving the bearish trend.
6. Stochastic red line bullish (going up).

For short position is just the opposite. If you entry in a trend where your position gets closed by the SL, and all the signals are giving the entry again, you just place a new order on the trend direction.

I also use a custom trailing stop to manage the orders, and it works this way:

- The price goes to 50 pips in my direction -> The SL moves to 15 pips profit.
- The price goes to 75 pips in my direction -> The SL moves to 25 pips profit ( 10 pips ).
- The price goes to 100 pips in my direction -> The SL moves to 36 pips profit. ( 10 + 1 ).
- The price goes to 125 pips in my direction -> The SL moves to 48 pips profit. ( 10 + 2 ).
- The price goes to 150 pips in my direction -> The SL moves to 61 pips profit. ( 10 + 3 ).
- And so on...until the price gets 1000 pips profit, then the SL is equal to the price pips profit and the position gets closed.


As you see, every 25 pips in my direction, I increase the trailing SL in 11,12,13,14,15....until the pips gained are equal to the SL, then the position gets closed, but that will happen when the profit is around 800, and it doesn't happen often.

I attached a screenshot where I marked what happened using my strategy in EURUSD for almost one year.

I just trade one position at a time, until this gets on positive ( until the price goes to 50 pips and the SL moves to 15 pips, then if the price just reversed, I will always gets 15 pips). But when the position is "secured" I open another one if I get the signal.

I used this strategy on demo for 4 months, and sometimes I had 5 positive positions, just gaining pips. In average, it gave me 15% to 20% profit. But before going live, I'd like to share it and to get some feedback.

I also attached the template with the custom indicators.

Let me know guys what do you think and if there is some improvements.

Also will be awesome if someone could automatise the strategy into an EA.

Please share your results and feedback.

Good luck.

Hi ibermex.

I'm working on EA and it is not clear for me what are the numbers on CCI indicator?

Interesting. Will look at it in more detail & will continue to follow with keen interest.

hey ibermex this looks interesting. i totally agree on focusing on daily timeframe charts for more profits and less noise. do you have any forward tests?

blam

And what you mean by "Chikou span on top of the price"? Chikou value of 26th previous bar is greater or less that current close?

You wont find many fans here cause u even have a template 4 mt4!

I mean that the Chikou Span it should be above the price, not below...if you have a look at the screenshot that I´ve upload, you see how the entries works, in any long entry, the Chikou Span (green line) is above the price, in short entry, the line is below the price...

I just did manual backtest for 5 pairs from 2010 to 2016. I´d love someone to design this strategy into an EA to make a proper backtest.

Maybe, but anyway anyone can build this template, you just have to add the indicators...Only Heiken Ashi Smoothed is not MT5 by default.

Hi Dani, actually the values of all the indicators, are the default value...

Here is a screenshot of what happened on EURUSD in 2014. My strategy had no any losing entry. I just marked the big pips entries, there is a few more that I didn't marked, those positions were between 15 and 300 pips.

Yesterday USDJPY gave a selling signal at 101.061, so far in my strategy is loosing 36 pips, let's see if the price reversed to get at least the 50 pips that the strategy needs to move the SL to 15 pips profit (my SL now is on 150 pips).

Template is here:

EU 2014 was trend down. Have you some test in ranging period. It is trending strategy and during trending period all will be ok. But wat about range? There can be losing periods during 2-3-4-... months?

I mean numbers near circles on the 1st screenshot

If you see, the circles are aligned vertically. That's because I'm marking the proper entries (where all the indicators are giving the right signal). Then, the number in red close to circles are are the pips gained, so those red numbers on the CCI has nothing to do with it, it is just the pips that the position gave, I only put it on the CCI because of finding a space to place the numbers.

Ok, understood now. Here is my 1st version of the EA. I tried to reproduce your 1st deal from the 2nd screenshot and got infinite position, because it never reach the SL :-) Last trailing SL was 1.3312 and EURUSD is under it from 2014 till now. So, I need rule for TP.

According to the OP the TP is practically 1000 pips triggered by a SL moved to 1000 pips:

"And so on...until the price gets 1000 pips profit, then the SL is equal to the price pips profit and the position gets closed."

Hi Dani,

MasterGuru is right in the way that the maximum TP is 1000 pips, but it doesn't work that way actually.

Every position opened in my strategy has 150 SL by default. Then, when the position starts going in my direction (in that screenshot on 2014 is selling), once it reach 50 pips, the SL moves from 150 above the entry to 15 pips profit below the entry. Meaning, if the price gets reversed (bullish in this case) the position will close at 15 pips profit. I know it sound a bit crazy and maybe non sense not closing the position when already has 50 pips profit, and close it when the price reverse to 15 pips, but the thing is I realised that any position needs "air" to move up and down. If you work with tight trailing stops, the position it will close very easy, because of the volatility.

So every position in my strategy is managed by a custom trailing stop loss that I've created. Already someone has coded the EA just for the trailing stop loss, that's how I tested my strategy in demo for 4 months. If not, you couldn't go to sleep, because you should have to be in front of the computer every time to adjust the SL every time that the position moves.

This is the relation of my custom trailing stop loss strategy:

- The price goes to 50 pips in my direction -> The SL moves to 15 pips profit.
- The price goes to 75 pips in my direction -> The SL moves to 25 pips profit ( 10 pips ).
- The price goes to 100 pips in my direction -> The SL moves to 36 pips profit. ( 10 + 1 ).
- The price goes to 125 pips in my direction -> The SL moves to 48 pips profit. ( 10 + 2 ).
- The price goes to 150 pips in my direction -> The SL moves to 61 pips profit. ( 10 + 3 ).
- And so on...until the price gets 1000 pips profit, then the SL is equal to the price pips profit and the position gets closed.

If you see, when the position reach 150 pips, the SL has moved to 61 pips profit already. It seems not a good deal, because there is almost 100 pips that you will not get if the price gets reversed, but in forex the key is not being greedy, but being patience.

Also every time that your position reach 50 pips profit, you can open a new position because the other one is already "saved" by the 15 pips profit.

I will upload later the custom trailing stop EA that someone did for me.

Ibermex and MasterGuru, thank you for explanation.

I thought about TP, but in the 2nd screenshot I saw that 2nd deal closed with 500 pips profit (and seems that it was closed not by SL, wasn't it?).
I already implemented your method of trailing stop (you may see how this EA accurately move SL on my screenshot). Tomorrow I will add TP.