Test of a strategy for the breakdown of moving averages in Forex Tester General test conditions A script for the test was created in Visual Strategy Builder. All transactions are open and fixed automatically. Four tests were performed: a reverse test and three options with a fixed stop. For analysis, only test statistics are used.
Let's take a closer look. Strategy description It is a trending technique for the breakdown of moving averages with the confirmation of trading signals by the oscillator.
TakeProfit, StopLoss, trailing stop and manual trading are not used. General statistics Despite the positive result, the profit factor is insufficient 1.
Recovery rates are very weak. Risk analysis During trading, only one transaction with a volume of 1 lot has always been open; dangerous money management techniques were not used.
All profit has been achieved in the last two months. All risk indicators are puria options method average. This trading method causes an active loss of profit, since the transaction does not close until a reverse signal appears. Favorable entry points are lost on the trend. At the same time, a narrow flat gives a lot of trades puria options method a guaranteed loss. Profit growth at the end of the test can be considered incorrect from the point of view of statistics — the profit is obtained as a result of only 4 transactions.
Test 2 "Long Stop" Conditions: Proceeding from the average daily volatility of GBPUSD over the past 3 years from 86 to pointswe try the option with a fixed stop at the maximum value.
The test should be carried out on the H1 chart with the "Bars to skip" parameter equal to General statistics All statistics indicators, including the ratio of profitable transactions to loss-making ones, are significantly improved. Transactions are clearly more successful during the trend.
Corresponding author. Received Aug 14; Accepted Nov 2.
The profit factor 1. Puria options method analysis The drawdown at the beginning of the test is not critical, the rest of the time the account is in a stable profit. The indicator in the account statistics refers to the intermediate drawdown — from the maximum value to the zone of Risk analysis Only one lot worked almost the entire period of the test; only several puria options method transactions were open at the same time.
All risk indicators are normal, there is no critical puria options method on the account. A very stable result for almost all statistics parameters, especially for such a speculative asset like the pound. For a period of 30 months, transactions are not enough.
There are suspicions that part of the profit is still lost. Anyway, it is difficult to achieve a profit of points in each transaction, the market may turn around earlier. The idea arises to reduce the parameters of the script in order to take away short-term volatility. Let's try.
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The planned loss of 25 points in each transaction is supposed to be compensated by a large number of successful entries. We allow the system to open no more than 4 transactions at puria options method same time. General statistics The profit factor is excellent but the parameters for returning account losses are worse than in the previous variant.
The reliability of trading did not generally suffer from this. Profit analysis There is no drawdown at all.
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The first part of the profit loss was compensated quickly enough, but the period of the last two months in this variant of the parameters was a failure, although previous tests showed a profit.
Risk analysis The load on the account is minimal. Trade stability is guaranteed. Let's check one more idea with a short stop — on a smaller timeframe and with a smaller step. We are waiting for an increase in the number of transactions.
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Profit factor is weak, recovery and reliability factors also decreased sharply. Profit analysis There is no drawdown throughout the test. The drawdown indicator refers to the profit period. The minimum result was obtained among the options with a fixed profit. Risk analysis The risk is minimal, no more than 2. The decrease in the period and step for the search of trading signals only worsens both the result and the statistics.
Conclusions on the test results We remind you: for the purity of the experiment, tests were performed automatically, without any manual intervention in the process.
Test of a strategy for the breakdown of moving averages in Forex Tester
The test showed that the Puria Method strategy does not puria options method well during strong trends precisely because the entry occurs on the breakdown of long averages and the movement is usually lost up to this point. In case of a small amplitude of the MACD histogram if the conditions for entry are fulfilledthe system often generates signals that contradict the current trend and the trading logic in general. Such signals are quickly closed at a loss. We recommend that you exclude the reverse option immediately, despite a positive result.
If volatility is insufficient, in the best case, we get fluctuations in the zone of the initial balance. All options with a fixed profit are stable, with risk reserves. The main thing is to assess volatility correctly. The strategy is clearly a medium-term one.
The Puria Method strategy ready in 7 minutes [Quick VSB guide]
Reduction of the period spoils the result, but you can try this strategy on less speculative assets, perhaps the result will be better.
The strategy is recommended for quiet trading with reasonable money management. Try It Yourself As you can see, backtesting is quite simple activity in case if you have the right backtesting tools. The testing of this strategy was arranged in Forex Tester with the historical data that comes along with the program. In addition, you will receive 20 years of free historical data easily downloadable puria options method from the software.
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