5min Bollinger breakout system - MT4/MT5 resources
Here's a profitable 5-minute system I came up with:
Trade EUR/USD 5 minute chart.
Indicators used: Upper Bollinger Bands (period 14, 2 standard deviations, low prices), Lower Bollinger Bands (period 14, 2 standard deviations, high prices), DeMarker (period 14), ADX (period 14, typical prices), ATR (4-hour chart, period 100), EMA (period 14, typical prices)
Open a long position when the price is within 5 pips of the upper limit, marker is greater than 0.7 or less than 0.3, and ADX is at least 40.
Open a short position when the price is within 5 points of the lower track, the marker is greater than 0.7 or less than 0.3, and the ADX is at least 40.
Take profit is 20 pips, and stop loss is larger, 10 * ATR.
in addition:
Close the position when we make a profit and the price falls below the EMA.
Close the position when we make a profit and the price is above the EMA.
This may be a little more complicated than it needs to be, but everything happens for a reason. Using low prices for high bands and high prices for low bands seems to work best. DeMarker and ADX confirm that we are in trend mode, not range mode (movements outside the band are more likely than within the band).
I only have 5 minutes of data from my broker (ibfx) for October 27, 2006, so that's all I have for backtesting. Setting the risk value (the amount you will lose if your stop loss is hit) to 10% results in a net profit of 25% in 4 months. A more aggressive VAR of 50% (which may not be entirely unreasonable since stops are rarely hit) would give a return of 215%, which is about 33% per month. Not too bad...but it did bring some pretty big losses (200-300 pips); in one instance it waited almost a month on a trade before closing it for a profit. Usually I make systems that accept losses more freely, so this was a bit of an experiment for me.
I look forward to all your comments. I've attached the EA; feel free to test it and let me know how it helps you. I'm particularly interested in seeing the results over longer time periods using IBFX or FXDD data (if anyone has access to those data).
Thank you and happy trading!
Trade EUR/USD 5 minute chart.
Indicators used: Upper Bollinger Bands (period 14, 2 standard deviations, low prices), Lower Bollinger Bands (period 14, 2 standard deviations, high prices), DeMarker (period 14), ADX (period 14, typical prices), ATR (4-hour chart, period 100), EMA (period 14, typical prices)
Open a long position when the price is within 5 pips of the upper limit, marker is greater than 0.7 or less than 0.3, and ADX is at least 40.
Open a short position when the price is within 5 points of the lower track, the marker is greater than 0.7 or less than 0.3, and the ADX is at least 40.
Take profit is 20 pips, and stop loss is larger, 10 * ATR.
in addition:
Close the position when we make a profit and the price falls below the EMA.
Close the position when we make a profit and the price is above the EMA.
This may be a little more complicated than it needs to be, but everything happens for a reason. Using low prices for high bands and high prices for low bands seems to work best. DeMarker and ADX confirm that we are in trend mode, not range mode (movements outside the band are more likely than within the band).
I only have 5 minutes of data from my broker (ibfx) for October 27, 2006, so that's all I have for backtesting. Setting the risk value (the amount you will lose if your stop loss is hit) to 10% results in a net profit of 25% in 4 months. A more aggressive VAR of 50% (which may not be entirely unreasonable since stops are rarely hit) would give a return of 215%, which is about 33% per month. Not too bad...but it did bring some pretty big losses (200-300 pips); in one instance it waited almost a month on a trade before closing it for a profit. Usually I make systems that accept losses more freely, so this was a bit of an experiment for me.
I look forward to all your comments. I've attached the EA; feel free to test it and let me know how it helps you. I'm particularly interested in seeing the results over longer time periods using IBFX or FXDD data (if anyone has access to those data).
Thank you and happy trading!
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