Using Price Action for Underlying Trend
Hello everyone,
My friend introduced me to this system where you can chart indicators purely based on pricing. He used this in the futures market. I thought I'd share it with you all. I managed to manually backtest until July 2009. I'm looking for any significant damage.
The formula is
(Opening-closing SMA of the last 5 periods / High-low SMA of the last 5 periods)*40+40
Mark the 40 and 65 levels, go long if it hits the 65 level and go short if it hits the 40 level. You will be in the market 100% of the time. The stop loss will be the stop loss when the next trade is triggered.
Rationality discovers underlying trends based solely on price action.
Manual backtesting shows it has some potential, especially on major currency pairs.
Note that this is a long-term strategy. Please see attached picture.
Sorry, I did the levels manually on a spreadsheet because I'm not an indicator programmer.
NOTE: When I was supposed to post this here, I also posted this in the trading discussion. Is there any way to delete other discussions? Sorry about that.
My friend introduced me to this system where you can chart indicators purely based on pricing. He used this in the futures market. I thought I'd share it with you all. I managed to manually backtest until July 2009. I'm looking for any significant damage.
The formula is
(Opening-closing SMA of the last 5 periods / High-low SMA of the last 5 periods)*40+40
Mark the 40 and 65 levels, go long if it hits the 65 level and go short if it hits the 40 level. You will be in the market 100% of the time. The stop loss will be the stop loss when the next trade is triggered.
Rationality discovers underlying trends based solely on price action.
Manual backtesting shows it has some potential, especially on major currency pairs.
Note that this is a long-term strategy. Please see attached picture.
Sorry, I did the levels manually on a spreadsheet because I'm not an indicator programmer.
NOTE: When I was supposed to post this here, I also posted this in the trading discussion. Is there any way to delete other discussions? Sorry about that.
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