This is quite a robust and profitable system; this was tested on 15M data in Amibroker from Feb 2002 to present. Works well over lookback periods between 15 and 40, T/P settings work well between 20 and 100.
While the spread cannot be accounted for Amibroker, the parameters used here should render the spread of little account.
This will also work on daily bars, but you may wait a long time between trades.
Rules: (15M bars)
Long: Close of bar is above Highest High of n-Periods at previous bar.
Short: Close of bar is below Lowest Low of n-Periods at previous bar.
Optimum settings: n= 36 periods
Take profit: 30 pips (can use 20 to 100)
No stop loss, just take the reversal signal as your stop / exit.
Use the attached Price Channel indicator and set it to 36, with a Shift of "1" and attach it to your chart (ignore the middle line in the indicator). Wait until the bar closes and put in your trade.
If the close of the bar signals a trade, you may want to see if price retraces to get a better entry, but I have no way of testing whether this works to one's advantage. If price goes on a tear you may not get in.
Annual return: 76% (no MM)
Profit factor: 1.16
Equity curve nice and linear.
Addendum to above:
Testing with exactly the same parameters produces very similar if not better results with USDJPY and EURCHF. Interestingly, 72 periods produces the best results with GPBUSD. Don't use 36 for the Sterling. Otherwise everything else the same. This system is more robust than I thought.
Any improvements or suggestions welcome.
Hi, are you can post some examples ( pic )?
Here's the EURO from today.
i dont understand how to use it. i have it attached to my chart...now, when price hits upper band do i buy or sell and vice versa?
Please see pic above.
You don't trade when price hits the indicator.
You wait until the finish of the bar to see if the close is over the high, or below the low.
Watch your clock, and as soon as you see the chart advance to the first tick of the next bar, make your move.
If your profit is not hit, your exit will be a trade in the opposite direction, so you will have to be available to keep an eye on the chart.
An EA would be great...
WNW just set the middle line in price channel to none and it wont show up.
From your picture above, before the Long trigger, there is the short trigger that actually a false move. How do you filter that?
I'm not able to compile the file. There are warning messages. Can you help to attach the ex4 file. Thanks in advance.
Yes, there is a signal before that would have been a loss. There is no filter, I've posted the rules. If you have an idea for a filter, please post it.
There is no ex4. Price Channel is an INDICATOR. There is nothing to compile.
Just put in on your chart. This is not an EA, it's a manual system.
the .mq4 file will need to be compiled in order to be used (or .mq4 will be compiled automatically if you restart MT4). Once compiled successfully, it will generate .ex4 file. Once you have the .ex4 file only the indicator can be used (or appear) in your MT4.
I'm not able to compile the Price Channel.mq4 file. There are errors. Hence i'm not able to use it. If you look into your Indicator folder, you will find two files of the name Price Channel. One is in .mq4 format and one is in .ex4 format. Appreciate if you can copy and post the .ex4 format here. I'm interested to test out this indicator.
thanks in advance.
Please find attached file as per your request.
Sorry for any misunderstanding on my part.