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Requirements for a Profitable Trading System

Illya Posted 22 Aug. in #Backtesting #Optimization #Robot #Automated Trading #Development #Ea

3/41

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In this article, we will talk about the general requirements for profitable trading systems. The article consists of the following topics:

Creating a logical and symmetric trading algorithm.
Getting the high quality history data.
Backtesting of the system.
Optimization.
Forward testing.

…

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Automation of Strategy Macd + Stochastic

Ayushvam Posted 13 Jan. in #Strategy #Article Contest #Articles #Trader Contest #Backtesting #Trader #Statistics #Macd #Visual Jforex #Stochastic

7/68

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In my previous article i have shown you a strategy based on MACD & stochastic oscillator. This strategy is one of the best strategy present in the library. Lets automate it and see
is this is a profitable strategy or not?
So lets start building the strategy first.

STEP-1 Beginning

1. Periods + Instrument Selections
2. Position Limiting Block
Take a look at the Figure-
STEP-2 Indicators

1. Macd

As from figure to Open a trade we have to look at the slope of macd.
is it upward or downward? To know we have to think about simple maths. we need three last histograms to be
Uptrend- "up down up"
Downtrend- "down up down"
See the Figures
hence it is confirmed that we have require the past three histogram data which is given by
MACD(Shift1), MACD(Shift2), MACD(Shift3)

2. Stochastic

A simple Stochastic of default period with shift-1
This is how it looks like-
STEP-3 Opening Orders
1. In the figure, The left hand portion is for opening Sell order and Right hand portion is for open Buy orders.
2. We have used 3 macd hence to Open a position we have to use same down up down strategy for opening Short position and vice versa for a long position.
3. Stochastic is default as crossover, if it …

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R: Backtest Strategy Efficiently

mcquak Posted 2 Dec. in #Backtesting #R #Statistical Learning

2/66

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Congratulations my dear fellow FX Trader. So you’ve found nice strategy with perfectly looking candlestick charts somewhere on the internet and you are about to hurry to trade it, right? Calm down mate and try to think about what I’ll try to write about here.

Why instant back testing

Do not worry, I won’t try to sell any strategy to you, because on the internet there exist so many strategies perfectly looking at the first glance, so I can’t compete in that regard. My last article was about R, and this one preserves the topic.
Please let me unrelieved some tool to you that can be used as almost instant back testing and verifying helper of any strategy you can imagine unless it’s based on technical analyses.
From longer time perspective I guess that vast majority of strategies usually turns out as poorly profitable or even loss-making. I guess that almost all traders can easily lost many days, weeks, and even months by forward testing some of these newly discovered trading strategies before become apparent that it behaves differently than it was looking at the beginning. And that’s not only time what one could lose regarding it but also money. No one is trading to lose money right?
To

…

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Despite the Naysayers, this System Keeps on Giving

fxsurprise8 Posted 24 Sep. in #EUR/JPY #Article Contest #Backtesting #Live Trading #Weekly System #Weekly Breakout System #Forward Test #Evaluating Systems

8/61

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Back in March when I posted the results for one of my simple systems, there was a lot of disbelief. How can such a simple system possibly work? If there’s no logic behind the strategy, then it can’t be profitable. You must’ve curve fitted the data somehow. These are just some of the comments I got when I posted this simple trading strategy.
In this article I will provide an update that shows how the system performed this year. I will also go over the process you should undertake to evaluate trading strategies and the steps needed before including a system in my trading arsenal. But first, a brief recap of the system and the backtested data.
Simple Set and Forget System for EUR/JPY
The rules for this set and forget system are very simple. It’s a weekly breakout strategy. After the markets open on Sunday at 23:00 CET (17:00 EST) we wait for the first 4 Hour candle to close. This happens at 3 AM CET on Monday, or 9 PM EST. If your broker has different 4 Hour settings, just use the hourly chart and draw a breakout box from 23:00 to 03:00.
For longs:
Place a Buy stop order at the high of the 4 Hour breakout box + 20 pips (+2 pips added for the spread)
For shorts:
Place a Sell st…

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Visual Jforex Strategy $0.8 Million Profits

Daytrader21 Posted 1 June in #Volatility #Backtesting #Strategy Contest #Visual Jforex #Trend Trading #200 Ema #London And New York Sessions #Gettimeunit Block

11/76

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Since many people have inquired me about my newest strategy that I've started running in the Strategy Contest since last month I thought it's best to write an in depth article that can be useful especially for guys who are still beginners with Visual JForex and secondly it will be useful for those who want to understand better the ins and outs of my strategy and answer question like why I choose to run the strategy only between some specifics hours and not let it run without interruption.
Since I'm an advocate of keeping things simple as possible, building up my strategy it will be quite easy even for a novice. But don't worry this article will guide you step by step on how to build up the strategy. The process of creating a strategy is what Dukascopy likes to see, so that was the main reason why I've decided to write this article.
By now I'm sure you must be intrigued by the article title, you may think it sound to good to be true, however the backtesting results show this strategy has generate in excess of $0.8M profits since beginning of the year. It has posted profitable month after profitable month with just one exception, the month of February, wh…

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Segmentation and Time-of-day Pattern in Fx

Daytrader21 Posted 7 Apr. in #Backtesting #Liquidity #Visual Jforex #Automated Strategy #Time-Of-Day Pattern #Empirical Research #Portfolio Balance Effects

4/31

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There is no mystery that the world is full of patterns and we're governed by them and the financial market are not exception of this rule. The time element such as the time of the day could also play a big role in how certain FX pairs may behave. There is an empirical research conducted by major institutions which suggest that there are strong evidence of a predictable time-of-day pattern in FX. This research was conducted by Angelo Ranaldo from SNB.
The main idea behind this article will be to turn a simple trading pattern backed up by an extensive empirical research into an automated trading system using the Visual JForex platform.
[list][/list]…

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London Fix Strategy Meets Visual Jforex

Daytrader21 Posted 2 Oct. in #Backtesting #Bearish #Bullish #Candles #London Fix #Visual Jforex #Automated Strategy #Blocks #Variables

3/19

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Not more than 3 months ago I've been writing an article about how you can trade the 4:00PM London Fix, giving out an easy step by step guide on how to profit from the price action around that time. You can read more about it here: London Fix Strategy
In this article we're going to make one step further and automatize the whole process by using Dukascopy Visual JForex. This will be one of those strategy that will require no indicators and I'm going to use some of the blocks that I've already been using them in my previous article, and you should be already familiarized with them. I like to keep things simple so in this regard even if you don't have any programming skills whatsoever you will be able to understand the whole process.
Lets proceed first by giving a short summary of our strategy:

Currency pair: GBPUSD;
Time Frame: 1h;
Target= 16 pips. Since beginning of the year the average pips volatility at 4:00PM was around 16.6 pips (see Figure 1);

…

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Visual Jforex Tips: Global Variables; Source Code & Backtesting

Fxtrader500 Posted 19 Sep. in #Backtesting #How To #Visual Jforex #Global Variables #Strategy Source Code

3/39

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This article will help people who are new to Visual Jforex when testing/developing a strategy. It explains the following:

How to set up variables that can be easily changed after the strategy has been built.
How to view Vjfx strategy source code & test a Vjfx strategy in Jforex.*

*In my experience, Jforex backtesting is faster. It also allows for multiple charts and provides a trade report (showing individual trades) at the end of a backtest.

How to set up variables that can be changed after the strategy has been built.
(All images can be enlarged by clicking on them.)

Global variables are variables that can be changed after the strategy has been built, without the need to go back and edit the strategy. They are very useful during testing or if you need to make regular adjustments to the strategy.
When a strategy is executed a window will appear. Every strategy starts with 6 default global variables. If it is run in Visual Jforex it will show a "Global Variables" window. If the strategy is run in Jforex it will show the "Define Parameters" window:
The “defaultPeriod” variable indicates the timeframe on which an indicator runs, i.e. Simple Moving Average on Hourly timeframe.
As yo…

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My Path to Successful Trading

Fxtrader500 Posted 4 July in #Psychology #Backtesting #Live Trading #Trader Stories #Trading Experiences #Strategy Description

7/47

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I have been trading for about 4 years. This is my first article for the contest. I would like to share some of my trading experiences and lessons I have learnt. Part 1: My first trade. I discovered forex trading while searching the web for something related to economics. I had no idea how to determine when or what to buy or sell but I knew that it was something I wanted to learn more about. I opened a demo account, spent a couple of minutes exploring the platform and started experimenting with different indicators. After a while I found a linear regression tool and used it to determine that the trend was moving down for EUR/USD. I opened 3 sell orders and after about an hour the demo account was up around 10% from those trades. An example of linear regression in JForex using an indicator from the JStore. My first trades were based on a similar situation to the one shown above. (Click to enlarge image) Even though I didn't really understand why those trades won, I was excited and told my friends and family about trading and how I thought I could make a lot of money from it. They didn't seem to think much of it. Nevertheless I knew I had to learn more about forex trading.Part 2: …

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Adding a Fixed Stop-loss to the inside Day Strategy

SpecialFX Posted 21 Feb. in #Backtesting #Stop Loss #Profitability #Inside Day #Riskreward

21/51

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On my previous article I presented a short-term strategy based on inside bars, which used a time-based exit, instead of fixed stop-loss and take-profit orders. Some community members suggested a few changes to it, including the inclusion of a fixed stop-loss, which I did his time, let's see if it improved the system's profitability. _______________________________ ► Different types of stop-losses Trading without any kind of stop-loss is asking for trouble, period. Sooner of later there will be a trade that will never return to its entry price, and will keep on going against you until your account is destroyed. However, stop-losses come in different flavors: You have the typical fixed price-based stops, which never change. Manual or automatic trailing stops, which follow the price as it moves in your favor, thus locking more and more profit (or reducing the loss until breakeven point). And then there's time-based stops, in which the trader manually closes the trade (or the platform does it if it has been programmed that way) after x number of periods/candles. My original "inside day strategy" uses time-based stops, so even though it looks like it does not have stops, …

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5 Reasons Why Every Trader Should Automate Their Strategy

bradhallett Posted 1 May in #Trading #Forex #Backtesting #Automation #Robot #Plan #Automate

24/67

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Every trader should automate their trading strategy. This is especially true for new forex traders given the low barriers to entry in the market and the generous amounts of leverage available. The process of developing an automated trading strategy has numerous ingrained benefits for traders that can help avoid making costly mistakes that are typically associated with the shortening of a trading career.Reason #1: Development of a Trading PlanA key to success in trading is to have a good plan and to have the conviction to stick with your plan over time. The basic tenet of a trading plan is to know exactly how you will act throughout the entirety of a trade before you place your initial entry. Often times, traders will bend this definition of a trading plan, allowing for some discretion throughout a trade. This is not beneficial to a trader because this level of discretion means that you cannot reliably backtest your strategy. By automating a trading strategy, the trader is forced to define exactly how each trade will progress. As such, by choosing to automate a strategy, you are more likely to be testing and trading a complete plan.Reason #2: BacktestingWhile it is not necessary to …

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Sort by:

Article Library

Requirements for a Profitable Trading System

Automation of Strategy Macd + Stochastic

R: Backtest Strategy Efficiently

Despite the Naysayers, this System Keeps on Giving

Visual Jforex Strategy $0.8 Million Profits

Segmentation and Time-of-day Pattern in Fx

London Fix Strategy Meets Visual Jforex

Visual Jforex Tips: Global Variables; Source Code & Backtesting

My Path to Successful Trading

Adding a Fixed Stop-loss to the inside Day Strategy

5 Reasons Why Every Trader Should Automate Their Strategy

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