Renko Simple Trend Follower - MT4/MT5 Resources
This system can be traded manually and you will find that it can be very profitable. This is a trending system and you may get "chopped" a bit during range markets, but you will see if your parameters are good you will have little retracement under these conditions.
The concept is to optimize (without curve fitting) the RENKO block size suitable for trading a specific currency pair. The system will add additional entries (new RENKO bars) in the appropriate direction on every price move.
RENKO BARS are just bars that are not measured by time, but strictly by price. In my opinion, price or PA (price action) is enough when trading with other indicators. The system has not applied this indicator (yet).
I have backtested it with NINJATRADER (screenshots and reports) but I want to convert it to MT4 (requires BEST Renko charts).
I'm hoping someone can help me build an EA that can be backtested against this technique.
----------------------------------
long:
- The bar rises "x" points, go long. No take profit (TP), trailing stop (TS) = 'x' + 5 (normal, but optimized)
Long add-ons:
- The bar rises "x" points, go long again.
Example:
EURUSD
- Price 1.1615
- Price rises to 1.1635 (20 points), enter long, no price target, TS = 25 (long 1)
- Price rises to 1.1655 (20 points), enter long, no price target, TS = 25 (long 2)
- Price rises to 1.1675 (20 points), enter long, no price target, TS = 25 (long 3)
- Price rises to 1.1695 (20 points), enter long, no price target, TS = 25 (long 4)
- Price rises to 1.1715 (20 points), enter long, no price target, TS = 25 (long 5)
---- Keep in mind that the trailing stop can move up (manually or EA) with each pip or at each bar close (my tests showed it jumping at the bar close)
- Price retracement to 1.1690 (25 pips), exit of long position (stop loss)
- Enter SHORT, no TP, TS = 25 (SHORT 1)
----------------------------------
Rinse and repeat
I ran this last year using NinjaTrader and a buggy script I created using their wizard. It basically does most of the work, but a little bit more.
I found GBPJPY (even with the spread ) as the best trading pair @ 20/25/25 (20 pip RENKO Bar, 25 TS LONG, 25 TS SHORT) (This system is incredibly profitable on futures but it's too much for me)
I also tested GBP/USD (not bad) and EURUSD (not bad). I believe EURJPY and other JPY pairs will perform best because they move quickly without retracement.
The system works independently, mixed with martingale and/or with additional indicators (I tested it with the T3 indicator), but found it to be profitable on its own even with wide spreads. It can be traded off with larger RENKO columns (longer time range) or smaller columns (more washes). Either way, it's very easy to view and test.
I've attached a screenshot or two with BT results. Please take a look and tell me what you think. This system can easily be done manually, which I recommend, but it's easier to let a good EA do your entries and TS for you! Please help!
Update: You will suffer losses using this technique. With every technique, you have something to lose. The key here is to go with the trend and cover your losses, which is why it's important to move a large number of pips quickly on a currency pair. Your win rate may only be 50%, but with an average profit of 5 bricks, your loss will be 0.7 bricks.
The concept is to optimize (without curve fitting) the RENKO block size suitable for trading a specific currency pair. The system will add additional entries (new RENKO bars) in the appropriate direction on every price move.
RENKO BARS are just bars that are not measured by time, but strictly by price. In my opinion, price or PA (price action) is enough when trading with other indicators. The system has not applied this indicator (yet).
I have backtested it with NINJATRADER (screenshots and reports) but I want to convert it to MT4 (requires BEST Renko charts).
I'm hoping someone can help me build an EA that can be backtested against this technique.
----------------------------------
long:
- The bar rises "x" points, go long. No take profit (TP), trailing stop (TS) = 'x' + 5 (normal, but optimized)
Long add-ons:
- The bar rises "x" points, go long again.
Example:
EURUSD
- Price 1.1615
- Price rises to 1.1635 (20 points), enter long, no price target, TS = 25 (long 1)
- Price rises to 1.1655 (20 points), enter long, no price target, TS = 25 (long 2)
- Price rises to 1.1675 (20 points), enter long, no price target, TS = 25 (long 3)
- Price rises to 1.1695 (20 points), enter long, no price target, TS = 25 (long 4)
- Price rises to 1.1715 (20 points), enter long, no price target, TS = 25 (long 5)
---- Keep in mind that the trailing stop can move up (manually or EA) with each pip or at each bar close (my tests showed it jumping at the bar close)
- Price retracement to 1.1690 (25 pips), exit of long position (stop loss)
- Enter SHORT, no TP, TS = 25 (SHORT 1)
----------------------------------
Rinse and repeat
I ran this last year using NinjaTrader and a buggy script I created using their wizard. It basically does most of the work, but a little bit more.
I found GBPJPY (even with the spread ) as the best trading pair @ 20/25/25 (20 pip RENKO Bar, 25 TS LONG, 25 TS SHORT) (This system is incredibly profitable on futures but it's too much for me)
I also tested GBP/USD (not bad) and EURUSD (not bad). I believe EURJPY and other JPY pairs will perform best because they move quickly without retracement.
The system works independently, mixed with martingale and/or with additional indicators (I tested it with the T3 indicator), but found it to be profitable on its own even with wide spreads. It can be traded off with larger RENKO columns (longer time range) or smaller columns (more washes). Either way, it's very easy to view and test.
I've attached a screenshot or two with BT results. Please take a look and tell me what you think. This system can easily be done manually, which I recommend, but it's easier to let a good EA do your entries and TS for you! Please help!
Update: You will suffer losses using this technique. With every technique, you have something to lose. The key here is to go with the trend and cover your losses, which is why it's important to move a large number of pips quickly on a currency pair. Your win rate may only be 50%, but with an average profit of 5 bricks, your loss will be 0.7 bricks.
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