This Forex System was initially introduced by ForexPhanton who discussed in one
of babypips' forums, and later on, it was selected by the
community of babypips.com as the System of the month for the month of October 2011.
Robopip analyzed this same system and reviewed it on his blog "Art of Automation". Bellow, you will find two of his articles about it:
http://www.babypips.com/blogs/art-of-automation/trading-system-test-amazing-crossover-system.html
http://www.babypips.com/blogs/art-of-automation/system-review-amazing-crossover-system.html
Finally, Huck tweaked it a bit and made it her own on her blog The Loonie Adventures of a Forex Noob and baptized her version as Trend Catcher 3.0. This last version of the system is the one I automated for those who enjoy mechanical trading.
Just as a reminder these are the rules of the system after Huck's adjustments:
Long Trade
5 Ema crosses above 10 Ema and RSI(10) is above the 50 level.
Short Trade
5 Ema crosses below 10 Ema and RSI(10) is bellow the 50 level.
Take Profit = 300 pips
Stop Loss = 50 pips
There is also a Trailing Stop applied every 50 pips. Say the trade is 50 pips in profit, the Stop Loss will be moved to breakeven. If the profit is 100 pips, then Stop Loss is moved to +50 pips of guaranteed profit and so on. Trades might be closed before hitting TP or SL if a contrary signal takes place. Say you are long and there is a signal to go short, the current trade is closed and a new bearish one is opened.
Below you can see, as an example, a screen shot of the first two trades of the year on EURUSD which turned out to be losers.
(Click on image to enlarge)
The yellow line represents the 5 EMA and the red one represents the 10 EMA. As you can see, the entry happens at the open of the candle, right after the cross over of the EMAs takes place, provided that RSI is in the desired level (above or below 50).
Don't expect all the entries to be immediately after the EMAs crossovers. With this system, sometimes the EMAs crossover occurs but the robot can't enter till the RSI indicator confirms, and sometimes RSI might trigger the 50 level first but then the expert needs to wait for the EMAs crossover.
Here are the results of the first week of 2012 for this system. Currency: EURUSD. Timeframe: 1 hour.
(Click on image to enlarge)
Parameters
Lot_Size: Number of lots to trade. Default 0.1
Ema_Period_1: Period of the short term Exponential moving average. Default 5
Ema_Period_2: Period of the long term Exponential moving average. Default 10
Take_Profit: Number of pips to set as the Maximum Profit Target. Default 300 pips
Stop_Loss: Number of pips to set as the Stop Loss level. Default 50 pips
Trailing_Stop: Trailing stop distance in pips
Finally...
As you noticed, the back testing performed only covers the first week of 2012. Make sure you test this system for longer periods of time, other currencies, maybe other timeframes as well and play around with the parameters to make it your own.
Remember: even though the first week of 2012 shows profitability that doesn't guarantee the same will continue to happen in the future. My personal opinion is that this system has not been designed with many concepts needed for design of reliable mechanical trading systems. It uses hard number of pips for Stop losses and Targets, which is an inflexible mechanism against volatility changes in the currency. There is no edge analysis of entries and exits and no evaluation of the parameter space. The back test from 2000 to 2011 is disastrous as well. I believe it is only a matter of time until everyone starts to see the real face of this system. In order to trust a mechanical system I would like to see steps taken in its design such as the ones I took when I designed this system. It is not as profitable but definitely way more reliable for long term trading.
Any feedback is appreciated. Feel free to leave your comments bellow.
Downloads
The Trend Catcher 3.0 or Amazing Crossover system was programmed for information and entertainment purposes only. There are no guarantees about the efficacy of the system or the absence of defects in the program.
By downloading the expert advisor you automatically agree that neither BabyPips nor The Lazy Trader are responsible for your trading results using the software.
Download AmazingCrossOver.ex4
Download AmazingCrossOver.mq4
Related Articles:
LT Trend Sniper - a Forex strategy that works
The Turtles Trading system automated (Expert Advisor for download)
MACD Divergence Indicator for Metatrader
Moving Average Crossover Indicator for Metatrader
CCI Divergence Indicator for Metatrader
Position Size Calculator for Metatrader
Multiple Trades Manager Expert Advisor
Go to the bottom of this page in order to see the Legal Stuff
Robopip analyzed this same system and reviewed it on his blog "Art of Automation". Bellow, you will find two of his articles about it:
http://www.babypips.com/blogs/art-of-automation/trading-system-test-amazing-crossover-system.html
http://www.babypips.com/blogs/art-of-automation/system-review-amazing-crossover-system.html
Finally, Huck tweaked it a bit and made it her own on her blog The Loonie Adventures of a Forex Noob and baptized her version as Trend Catcher 3.0. This last version of the system is the one I automated for those who enjoy mechanical trading.
Just as a reminder these are the rules of the system after Huck's adjustments:
Long Trade
5 Ema crosses above 10 Ema and RSI(10) is above the 50 level.
Short Trade
5 Ema crosses below 10 Ema and RSI(10) is bellow the 50 level.
Take Profit = 300 pips
Stop Loss = 50 pips
There is also a Trailing Stop applied every 50 pips. Say the trade is 50 pips in profit, the Stop Loss will be moved to breakeven. If the profit is 100 pips, then Stop Loss is moved to +50 pips of guaranteed profit and so on. Trades might be closed before hitting TP or SL if a contrary signal takes place. Say you are long and there is a signal to go short, the current trade is closed and a new bearish one is opened.
Below you can see, as an example, a screen shot of the first two trades of the year on EURUSD which turned out to be losers.
(Click on image to enlarge)
Don't expect all the entries to be immediately after the EMAs crossovers. With this system, sometimes the EMAs crossover occurs but the robot can't enter till the RSI indicator confirms, and sometimes RSI might trigger the 50 level first but then the expert needs to wait for the EMAs crossover.
Here are the results of the first week of 2012 for this system. Currency: EURUSD. Timeframe: 1 hour.
(Click on image to enlarge)
Parameters
Lot_Size: Number of lots to trade. Default 0.1
Ema_Period_1: Period of the short term Exponential moving average. Default 5
Ema_Period_2: Period of the long term Exponential moving average. Default 10
Take_Profit: Number of pips to set as the Maximum Profit Target. Default 300 pips
Stop_Loss: Number of pips to set as the Stop Loss level. Default 50 pips
Trailing_Stop: Trailing stop distance in pips
Finally...
As you noticed, the back testing performed only covers the first week of 2012. Make sure you test this system for longer periods of time, other currencies, maybe other timeframes as well and play around with the parameters to make it your own.
Remember: even though the first week of 2012 shows profitability that doesn't guarantee the same will continue to happen in the future. My personal opinion is that this system has not been designed with many concepts needed for design of reliable mechanical trading systems. It uses hard number of pips for Stop losses and Targets, which is an inflexible mechanism against volatility changes in the currency. There is no edge analysis of entries and exits and no evaluation of the parameter space. The back test from 2000 to 2011 is disastrous as well. I believe it is only a matter of time until everyone starts to see the real face of this system. In order to trust a mechanical system I would like to see steps taken in its design such as the ones I took when I designed this system. It is not as profitable but definitely way more reliable for long term trading.
Any feedback is appreciated. Feel free to leave your comments bellow.
Downloads
The Trend Catcher 3.0 or Amazing Crossover system was programmed for information and entertainment purposes only. There are no guarantees about the efficacy of the system or the absence of defects in the program.
By downloading the expert advisor you automatically agree that neither BabyPips nor The Lazy Trader are responsible for your trading results using the software.
Download AmazingCrossOver.ex4
Download AmazingCrossOver.mq4
Related Articles:
LT Trend Sniper - a Forex strategy that works
The Turtles Trading system automated (Expert Advisor for download)
MACD Divergence Indicator for Metatrader
Moving Average Crossover Indicator for Metatrader
CCI Divergence Indicator for Metatrader
Position Size Calculator for Metatrader
Multiple Trades Manager Expert Advisor
Go to the bottom of this page in order to see the Legal Stuff