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Introduction
January 2019 was my best performance in the Strategy Contest with a 1st position bringing my total earnings from the contest to $6,600. The strategy was ‘prophetically’ named Breakout_year_2019_Jan and it delivered the best result possible.
The strategy was based on 2 currency pairs, the EURUSD and the USDJPY on a 1 hour time frame. The pairs were chosen because of the relatively low bid-ask spread and high liquidity which results in low slippage. The hourly time frame was chosen to have some stable results after eliminating most of the market noise.
Fig 1
In fig 1, above the default period was 1 hour as earlier alluded to, and Instrument_1 was the EURUSD and Instrument_2 was USDJPY
Buy Strategy
For a buy to be consummated the following conditions need to be fulfilled.
ú CCI should be less than or equal to -100,
ú MACD should be greater than 0
ú Stochastic (5,3,3), slow D% should be less than or equal to 25.
When these conditions are met on an hourly time frame, a Buy order is placed at market for a maximum order size of 15 million and a maximum allowable slippage of 5. The Take profit level will be set at 8 pips from entry and stop loss at 35 pips away.
Fig 2
Fig 2 above shows how the Buys side strategy would look like.
Sell Strategy
For a sell to be consummated the following conditions need to be fulfilled.
ú CCI should be greater than or equal to 100,
ú MACD should be less than 0
ú Stochastic (5,3,3), slow D% should be greater than or equal to 25.
When these conditions are met on an hourly time frame, a Sell order is placed at market for a maximum order size of 15 million and a maximum allowable slippage of 5. The Take profit level will be set at 8 pips from entry and stop loss at 35 pips away.
Fig 2
Fig 2 shows how the sell strategy would flow.
Conclusion
The strategy will need to continuously be reviewed so that it will deliver consistent results. Improvement in the risk-reward ratio is another aspect to look at. The strategy can also incorporate other currencies in future.
January 2019 was my best performance in the Strategy Contest with a 1st position bringing my total earnings from the contest to $6,600. The strategy was ‘prophetically’ named Breakout_year_2019_Jan and it delivered the best result possible.
The strategy was based on 2 currency pairs, the EURUSD and the USDJPY on a 1 hour time frame. The pairs were chosen because of the relatively low bid-ask spread and high liquidity which results in low slippage. The hourly time frame was chosen to have some stable results after eliminating most of the market noise.
Fig 1In fig 1, above the default period was 1 hour as earlier alluded to, and Instrument_1 was the EURUSD and Instrument_2 was USDJPY
Buy Strategy
For a buy to be consummated the following conditions need to be fulfilled.
ú CCI should be less than or equal to -100,
ú MACD should be greater than 0
ú Stochastic (5,3,3), slow D% should be less than or equal to 25.
When these conditions are met on an hourly time frame, a Buy order is placed at market for a maximum order size of 15 million and a maximum allowable slippage of 5. The Take profit level will be set at 8 pips from entry and stop loss at 35 pips away.
Fig 2 Fig 2 above shows how the Buys side strategy would look like.
Sell Strategy
For a sell to be consummated the following conditions need to be fulfilled.
ú CCI should be greater than or equal to 100,
ú MACD should be less than 0
ú Stochastic (5,3,3), slow D% should be greater than or equal to 25.
When these conditions are met on an hourly time frame, a Sell order is placed at market for a maximum order size of 15 million and a maximum allowable slippage of 5. The Take profit level will be set at 8 pips from entry and stop loss at 35 pips away.
Fig 2Fig 2 shows how the sell strategy would flow.
Conclusion
The strategy will need to continuously be reviewed so that it will deliver consistent results. Improvement in the risk-reward ratio is another aspect to look at. The strategy can also incorporate other currencies in future.