This strategy uses an MA crossover method for trading. Basically if
the fast sma reading is above the slow ema reading we have an up
trend
and should Buy. If the fast sma reading is below the slow ema reading
we have a down trend and should Sell the market. I've experimented
with different fast and slow MAs and back testing and have found That
using a 9 SMA with the 34 EMA seems to produce the best results for
this style of moving average crossover trading strategy. This is the
latest
version of my MA trading strategy and uses other readings as well to
filter out weak signals or choppy markets. MA crossover strategies
work best in a trending market which is why most of my testing
results
have shown it seems to work best on Yen currency pairs which for this
version I found the best pair seems to be the EUR/JPY which its set
to
trade but GBP/JPY also works well. I use the MACD reading to help
filter trades and confirm trend direction. Currently I compare 2
MACDs
both the 5 minute TF and the 4 hour TF to check trend direction. I
use
8, 17, 9 as my settings on the MACD indicator, the same settings Joe
DiNapoli prefers. If
both MACD readings say we have an up trend and our fast MA is above
our slow MA, and has been for the last 2 periods then we have a BUY
order confirmed. The opposite is true for a SELL condition. I've seen
the best results for this strategy using either a 5 minute or 15
minute timeframe. This also helps the trade volume to be high enough
for this competition. When choosing the trade equity for the BUY/SELL
order it calculates about 20% of the account equity and places that
many units in the order. So as the account equity rises the trade
amount rises as well. If the account equity falls the trade amount is
decreased. This is to help it from blowing the whole account amount
in
1 trade or having margin called on the account. Testing has shown
that
in a trending market this strategy will win about 70% of its trades.
I
have tested with many different TP and SL settings. If the TP is
higher than the SL and TP above 50 pips it works best. I am currently
using TP of 54 pips and SL of 49 pips which have shown to be most
profitable in backtesting. I have also implemented a stop loss moving
system. Once the trade reaches 28 pips the SL is moved to secure 10
pip profit and then a trailing stop is placed to trail market at 18
pips. In case the market suddenly changes direction this gets us some
profit and prevents a loss on the trade. The trail stop system isn't
work properly so in my future versions I will be debugging and fixing
it to work exactly as expected.