What I have understood is that the bear candle allows to look again for a new set of three bull candles. The EA works like that.
Michel is correct. If we have 3 bear candles, we open the trade for a buy. Even if price continues heading north for another 1000 pips there is NO reentry, because we have no way of knowing what price is going to do next.
What I noticed is that after a good move of 3 days in a row, typically price would at least give you another 30 pips at least. I was trying capitalize on that. I also noticed that half the time price would continue for 100-150 pips in a good strong trend. Again, I was trying to capitalize on that as well.
But this system does not have a reentry rule. You just wait for a completely new set of signals to appear. That's why I started looking at other pairs to trade this system with. When 1 pair is days away from giving a good signal, another pair may be perfectly setup for it.
Hope that helps.
Willis11of12, Michel, and wpaten--thank you, that does answer it!
wpaten..."If we have 3 bear candles, we open the trade for a buy"..you meant 3 BULL candles, right?
3 Bullish Bars, buy on open of 4th bar.
3 Bearish Bars, sell on open of 4th bar.
When entered, set a limit(take profit) of +100 pips, and brekeven at +30 pips.
Stop-loss is 90 pips or previous bar's low(if bought), and previous's bars high(if sold)2 pips above/under them. Whichever stop is smaller, use it.
Yes gnllr, that is correct. Sorry about that. I didn't get my nap this afternoon.
Has anyone done optimizing on the other pairs besides the GBPUSD that I optimized?
My backtest results
I haven't done any optimization on other pairs but I did my own backtest for 2007 (using original rules). I'm using North Finance which is GMT+2. While certainly profitable, my results weren't nearly as good as previously posted. Also, I tested EURJPY instead of CADJPY becuase NF doesn't have it on my demo account. EURJPY had no losses for year to date.
2007 Results YTD (including spread):
GBPUSD: 19 trades, 442 pips, 3 losses, 100 pip PT reached 4 times
GBPJPY: 17 trades, 301 pips, 3 losses, 100 pip PT reached 5 times
USDCHF: 19 trades, 252 pips, 4 losses, 100 PT reached 3 times
EURJPY: 18 trades, 760 pips, 0 losses, 100 PT reached 4 times
Totals (all 4 pairs):
Jan: 345 pips, 11 trades
Feb: 402 pips, 13 trades
Mar: 41 pips, 8 trades
Apr: 485 pips, 9 trades
May: -275 pips, 11 trades
Jun: 813 pips, 14 trades
Jul: -56 pips, 7 trades so far
SUM: 1410 Total Pip profit, 73 Total Trades (16 at the 100 TP)
AVG: 235 pips/month, 10.4 trades/month
235 pips/month is a decent return.
Your results are closer to my own, when I started looking into this strategy. I never thought it was good for 6000+ pips, or whatever the number was. With all four pairs going at once, I only figured for 3500 pips for the entire year. But again that was for all 4 pairs.
It is a profitable strategy, but it only has about 2-4 trades per month, per pair. The key is patience and waiting for the setup to take place.
Also I would be curious as to what trades you have listed for July so far. According to my trading I am up 90 pips with this strategy. 3 trades for 30 pips each. But then again, one of those trades was on the CAD/JPY (which is one that you do not trade).
Thanks for the input though. Much appreciated.
My July trades
Here's my July trades to date. BTW, today is a short entry for the EURJPY, so far so good...
07-02 GBPJPY +22 pips (with spread)
07-02 EURJPY +25 pips
07-03 USDCHF -90 pips
07-06 USDCHF +26 pips
07-08 EURJPY +25 pips
07-10 GBPJPY -90 pips
07-11 GBPUSD +26 pips
07-16 GBPJPY +22 pips
07-17 EURJPY In progress...
I really like this system wpaten. Thank you again for sharing it!
What were your trades for July?
You're welcome. :-)
My trades for July using this strategy are as follows:
7/6/07 - USD/CHF Buy = 30 Pips
7/9/07 - CAD/JPY Buy = 30 pips
7/12/07 - GBP/USD Buy = 30 Pips
You have quite a few more trades than I do. Also you had a trade for the GBP/JPY on July 2nd, but on my charts (using FXDD as the broker) I don't have a setup.
I do not trade EUR/JPY currently. I looked at that pair because I like how it trends so well. But I didn't like the results that my preliminary investigations were giving me. Maybe I'll go back and take another look-see.