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.
Place a Buy stop order at the high of the 4 Hour breakout box + 20 pips (+2 pips added for the spread)
Place a Sell st…