Forex Trading Strategies & System – 2nd Chance

Morning all (afternoon here in the UK).

I thought I'd share some of these as I've been interested in back-testing trading strategies. This can be done using charts from ProRealTime : Real Time Technical Analysis Software which have a fantastic built-in back-test engine. Using a simple scripting language you can code up your strategy and test it against historical data.

If anyone has any idea for a strategy to back-test, let me know. The sort of things that are possible are simple things like combinations of indicators, crosses on moving averages as well as money management (position sizing, stoploss and profit stop) etc... You can also achieve certain things like candlestick recognition but its a bit more difficult.

I've created a few strategies that rely on indicators only. I'm using these to test whether standard setups actually work on the S&P500. To my surprise some of them are great and others are truely awful. Below are some of the better ones.

What I will do is periodically add strategies to this thread but if anyone wants to butt-in with an idea, comment or criticism, or a strategy of their own (with or without a back-test) please feel free! :)

Each back-test you start with a pot, in this case its $10,000.
- Indicator combinations generate buy / sell signals.

- A buy signal is represented by a green arrow under the index
- A Short Signal is represented by a red arrow over the index
- A Close signal (Exit the previous trade) is represented by an "X"
- A Stoploss signal (stop was triggered) is represented by a Square

- On each buy/short signal, enter a trade at a specific position size.
- Above the graph there is an "Equity Curve". This shows how much your pot has grown over time

You'll be surprised to see just how successful some simple strategies are!!

his is a simple "Bull/Bear Market" strategy designed to catch bull/bear markets on a multiple year timeframe.

- Buy signal is when the 50 day Exponential Moving Average Crosses above the 200 day EMA.
- Sell signal is when the 50 day EMA Crosses below the 200 day EMA.

$10k invested in 1970, trading the S&P500 futures at $100/pt. Stop and reverse (close longs and go short or close shorts and go long) on each subsequent buy/sell signal.

Alternatively you could invest in a leveraged long/short S&P500 fund on the buy/sell signals such as SSO / SDS.

This trading strategy is perfect for anyone who is trading infrequently and wishes to manage and consistently grow an account over a long time frame, regardless of bull or bear markets. Tested as working as far back as 1970!!

BTW if you're interested the next 50-200 EMA cross (Bull) could occur some time in 2009 if the markets can maintain a floor at these levels.

This is a simple intraday trading strategy used to move with the trend. First you must identify the short term trend. This only works if you trade with the trend and it does not work in a choppy sideways-market.

Setup a 15 minute chart, using RSI(14).

- Buy signal is when the RSI goes above 30.
- Sell signal is when the RSI subsequently goes over 70.

Trades are assuming a $10k pot with $100/point trades and a 2% stoploss. This strategy works on the 15 min timescale in an uptrend. I haven't tested it but I would imagine short when the RSI goes below 70 and cover when it touches 30 would work in a down-trend.