Trend folowing trading strategy “EMA & Awesome Oscillator” is designed mainly for Forex and can be used on all currency pairs on any time-frame. Its rules state that:
A trader should place a buy order when price cross 200 ema from bellow and Awesome Oscillator shows a green bar or above zero value. A sell order should be placed when price cross zero value from above and Awesome Oscillator shows a red bar or bellow zero value.
You can find more about the 200 EMA + Awesome Oscillator here.
For our test, we have used a Trailing Stop in 30 Pips which is launched after a trade has started and is modified each new 1 pip of profit. From our point of view, such approach allows to maximize profit and minimize drawdown. We have run the test for 2010.01.01-2018.12.31 using Control Points modelling on EURGBP-H1, with 1:10 leverage, without reinvestment, assuming spread equals 10 ticks, with starting balance $10,000. These are the main parameters of financial performance, that may allow you to evaluate whether this strategy worth your attention or not:
|ROI||# of trades||Winning ratio||Max. drawdown|
The following charts may give some possible insights on which filters to apply (time sessions, day of week limitation, trend strength threshold, overbought/oversold conditions, volatility range) to turn this strategy profitable should you decide to use this strategy in your investment portfolio:
1.“EMA & Awesome Oscillator” trading strategy has produced 19.17% annualized ROI during 2010–2018 years using 1:10 leverage. Maximum drawdown was 48.26%.
2. We have analyzed data received from a test of “EMA & Awesome Oscillator” trading strategy during 2010–2018 years and applied some filters such as ADX and Volume. As a result, the profitability of the strategy has increased from 19.17% up to 32.21% and its drawdown has reduced from 48.26% to 40.63% using leverage 1:10. Reducing the drawdown has allowed us to increase the leverage up to 1:16, which in turn, has resulted in annualized ROI increase up to 57.5%!
If you decide to buy an EA, coded in accordance with the strategy and used for the test, or to make any amendments to the original strategy rules – please, feel free to contact us.
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