Category Archives for Strategy

How to Backtest a Day Trading Strategy – Hourly Breakout Part 3

Welcome to this third and final part in the series in which I give you an over-the-shoulder look into a trading strategy development process.  I test and develop a trading strategy to show you each step of the process.  By the end of the development I hope to have a useable strategy, something that you may also consider trading.

In the first part of this series I outlined the rules of the strategy and began the development stages.  If you haven’t seen that video yet then you can see it here: PART 1

In the second part I looked into how trading each day of the week effected results.  Then looked at the duration or time window we could take the trades.  Lastly I introduced a previous day filter.  Looking at what happened if the previous day was a white or black candle.  If you haven’t seen that one then you can watch it here: PART 2

In this third part of the development I look at the level at which the breakout entry will occur.  I use a multiple of the High to Low range.  And lastly, once I have some results I am happy with, I go on to apply the strategy to some out of sample data.  This is to see how the strategy would have worked in unseen forward data.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Backtest a Day Trading Strategy – Hourly Breakout Part 2

Welcome to another series in which I give you an over-the-shoulder look into a trading strategy development process.  I test and develop a trading strategy to show you each step of the process.  By the end of the development I hope to have a useable strategy, something that you may also consider trading.

In the first part of this series I outlined the rules of the strategy and began the development stages.  If you haven’t seen that video yet then you can see it here: PART 1

In this second part I continue going through the development.  Firstly look into how trading each day of the week will effect results.  Then look at the duration or time window we can take the trades.  Lastly I introduce a previous day filter.  Looking at what happens if the previous day was a white or black candle.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Backtest a Day Trading Strategy – Hourly Breakout Part 1

Welcome to another series in which I give you an over-the-shoulder look into a trading strategy development process.  I test and develop a trading strategy to show you each step of the process.  By the end of the development I hope to have a useable strategy, something that you may also consider trading.

In this video I outline the strategy rules on the whiteboard then go ahead with the first stages of development.

Even after the first 2 stages, we have the start of a strategy with some promise.

Here’s the rules for the strategy we will be looking at:

We are trying to identify a time window within the trading session where we can take a breakout above the high or below the low of the session so far.

Firstly we start with a 1 hour time window.  Let’s imagine our time window is 1am to 2am.  At 1 am we look at the high and the low of the session so far.  The market we are looking at is USD/JPY and so the session began at 17:00 the previous day.

If within our 1 hour time window the high or low of the session is broken then we take the trade.  We go long if the high is broken and short if the low is broken.

We will use a stop loss.  And we exit the position at the end of the session.  So trades last less than 24 hours.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Backtest a Trading Strategy – 4hr Outside Bar Part 5

This is the fifth and final part in this series where I take a Forex strategy I found for free and backtest it.  I hope to make some improvements and by the end of the development process it could be a useable strategy.

If you haven’t seen the first part then you can watch that here: PART 1

If you haven’t seen the second part then you can watch that here: PART 2

If you haven’t seen the third part then you can watch that here: PART 3

If you haven’t seen the fourth part then you can watch that here: PART 4

In this video I continue the development process.  I change the dynamics of the strategy turning it into a intra-day strategy.  I do this by exiting the trades at the end of the day.  Again, I will look at some stable stop loss and take profit levels.  Watch the video to find out how it works.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Backtest a Trading Strategy – 4hr Outside Bar Part 4

This is the fourth part in this series where I take a Forex strategy I found for free and backtest it.  I hope to make some improvements and by the end of the development process it could be a useable strategy.

If you haven’t seen the first part then you can watch that here: PART 1

If you haven’t seen the second part then you can watch that here: PART 2

If you haven’t seen the third part then you can watch that here: PART 3

In this video I continue the development process.  I continue looking at Stop loss and Profit levels.  But this time rather than using fixed pip or fixed Dollar levels, I am going to choose a level related to the volatility of the set up bar.   Watch the video to find out how it works.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Backtest a Trading Strategy – 4hr Outside Bar Part 3

This is the third part in this series where I take a Forex strategy I found for free and backtest it.  I hope to make some improvements and by the end of the development process it could be a useable strategy.

If you haven’t seen the first part then you can watch that here: PART 1

If you haven’t seen the second part then you can watch that here: PART 2

In this video I continue the development process.  I look at choosing an end time to stop trading, stop loss levels and profit targets.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Backtest a Trading Strategy – 4hr Outside Bar Part 2

This is the second part in this series where I take a Forex strategy I found for free and backtest it.  I hope to make some improvements and by the end of the development process it could be a useable strategy.

If you haven’t seen the first part then you can watch that HERE

In this video I show you the coded strategy on the charts.  I then start my first development and show you how the performance changes for the better.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Backtest a Trading Strategy – 4hr Outside Bar Part 1

New Series

 

I have decided to create a new video series in which I give you an over-the-shoulder look at how I backtest and improve mechanical trading strategies.

In this first video I begin to code and test a free trading strategy found on the Forex Factory forum.   It’s a strategy for trading Forex on a 4 hr timeframe.

The Rules:

Long Trades:

  • The setup bar has to be above the 30 period EMA on the 4hr chart
  • The setup bar has to be an Outside Bar
  • The setup bar has to close above the open
  • If all conditions are met then buy the next bar at the open

Short Trades:

  • The setup bar has to be below the 30 period EMA on the 4hr chart
  • The setup bar has to be an Outside Bar
  • The setup bar has to close below the open
  • If all conditions are met then sell short the next bar at the open

Stop losses and Exits were a little vague.  So I plan to test a number of different methods I know have proven to work for different strategies in the past.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Avoid a Blown Trading Account

I’m writing this article at the start of January 2019.  In the last few months I have observed many traders lose massive amounts of their accounts.

Interestingly though, many of these same traders had previously made some extraordinary gains prior to when the stock market declined starting around October 2018.

In the video I talk about the main reason this unfortunately happened.  I hope this hasn’t happened to you, but if it has then maybe there’s some takeaways here for you.

And if this didn’t happen to you or you aren’t trading yet, maybe what I show you could help prevent losses for you in the future.

 

 

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

How to Easily Code a Trading Strategy – RSI2 / Multicharts

In a previous video I showed you an effective way to make money trading the S&P 500 using a very reliable indictor; RSI.  If you have not yet seen the video then you can watch it here

The strategy which I learnt from Larry Connors works by taking advantage of the S&P’s tendency to revert to the mean on a daily timeframe.  Today I am going to show you exactly how to code or program the strategy into my trading platform, Multicharts.  If you’re curious about what it takes to code a profitable trading strategy so you can then backtest or even trade in an automated way, then I think you’re going to love this video.

I will walk through the code explaining each step so by the end of it you’ll have a very good understanding how Multicharts’ language works.  Multicharts, by the way uses a very similar coding language to Tradestation.  So you can apply this code to Tradestation too.  Once you have the code you can then backtest the strategy on different markets, make small adjustments to entries and exits and create optimisations.

The code is available on the internet but I have written it myself to simplify things as much as possible.

Watch the video now:

 

Here’s the code that I wrote out in the video which works in Multicharts:

// Code for RSI2 Daily strategy Long Only

// Entry

If marketposition = 0 and ( RSI(Close,2) <= 10 ) and

( Close > Average(Close, 200) ) Then buy this bar at Close;

// Exit

If marketposition = 1 and ( Close > Average(Close,10) ) Then sell this bar at Close;

I hope what I have showed you doesn’t appear too complicated.  Profitable trading strategies don’t necessarily have to be complicated, it’s often a myth!

I would encourage you to have a play around with Multicharts yourself.  They actually offer a free 30 day trial.  You can get that here:  https://www.multicharts.com/  By the way, I am not affiliated what so ever with Multicharts, I just love the platform!

In the next video I will continue with the code we’ve just created and look in detail at the results of the strategy.  I’ll explain the Performance Report accessible in Multicharts.  Showing you all of the important charts and numbers gathered by the software and how and why they are important when really trading.

As always, if you have any questions about it then please ask.  Comment or email me jarrod@thetransparenttrader.com

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

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