Hey now. This Forex Factory member says his system is highly discretionary.
What happens when we remove all subjectivity? This is Trader's Landing.
In this installment of trader's landing we're going to examine the Williams %R, SAR crossover,
15-minute candle system. Including the indicators used, and entry criteria with examples.
Then i'm going to test it 100 times in a row, followed by an analysis of the test data,
a review of the equity curve, and conclude with my thoughts on the strategy.
You can review the system specifics in the video description along
with the link to the thread on forex factory where i found this strategy.
Just a note before we begin i asked a question on this thread
if anybody has done any back testing and this was the response from the thread creator Rocky Point:
"This system is highly discretionary so any back testing i would think needs to be done manually
a very large task. You seem to be looking for a black box system with strict rules which you
could develop i guess but using this just going by indicators is a loser. Day trading requires good
understanding of price action and being ruthless with money management risk management. These are
infinitely more important than indicators also why i don't think you can make a successful EA."
That being said on this channel i review rigid indicator based trading systems with strict and
clearly defined roles that you follow each and every time you see it on the chart no matter what.
So we have two points of view on this particular topic. Let me know your thoughts in the comments.
Now let's get into it.
The indicators we use in this system is going to be the Williams %R which is a built-in indicator
in TradingView, we are, I'm going to just change the color to yellow, change the upper band to 50
and make it a nice bright white. So we could see it. Remove the middle band the
lower band and the background and press okay. We're going to use the parabolic SAR strategy
indicator, which is another built-in TradingView indicator. And that's going
to be default settings. And i'm going to add the 200 EMA just for trend direction.
So for a long example we're looking for the Williams %R to be over the 50 line,
price to be above the 200 EMA, and for a parabolic SAR entry signal. Which all
happens on this candle right here. That's our trigger candle. Gonna place our buy there,
stop below the swing low, and we're gonna target two to one. And that is a winner.
So here we have another entry. We have price above the 200 EMA, Williams %R above the 50 line,
and we have a SAR strategy buy signal. So that is our trigger candle. We are going to buy
right there place our stop below the swing low, greater than five pips, and target two to one.
And that happens right here. So we have another winner. We have a short entry available to us here
price below the 200 EMA, parabolic SAR strategy indicating a sell, and the Williams % under the
50 line. So this is our trigger candle. Place a stop above the last swing high and target 2 :1.
And that actually brings us to a profit on this candle right here.
So we have a setup right here. We have price under the 200 EMA,
parabolic SAR strategy sell signal, and the Williams % under their 50 line.
So this is our trigger candle. Stop above the previous swing high targeting 2:1.
And let's see how this plays out. And we are a winner.
So now it's time to do what we do.
Let's review the test data. This test was done on the Euro /USD on the 15 minute candles. It
took four months to find 100 trades. There were 45 winners and 55 losers
for a winning percentage of 45%. Most consecutive wins in a row was five
most consecutive losses in a row was four. Gain on the account was 35% risking 1% per trade.
The equity curve here is interesting. You can see it starts out very choppy ranging
up and then down. This is where most traders would have just moved on to a new system.
But if you stuck with it you clearly see a nice uptrend.
How do we find the crumbs on this system? Just by eyeballing it, a multiple take profit exit
strategy may not be that effective here. But maybe adding a trend continuation method like
hidden divergence could work. One may be tempted to look at the beginning of the equity curve and
see what filters you can add. But you do not want to pigeonhole the system based on a very
finite set of data. You could always come up with a system that works on one set of historical data,
but without extensive testing there is no way of knowing what to expect on another data set.
In conclusion we have two valid schools of thought here
that are common in this industry. This system was profitable on this data set
so it could be worth optimizing further and then go through some additional testing.
Thank you for watching please hit the like button subscribe and turn on notifications.
Let me know if you have any questions comments or concerns in the comment section below.
Bye for now.