The Moving Average Trading System is a robust strategy that leverages the power of Simple Moving Averages (SMAs) with periods of 5, 20, 40, and 60. If you're looking to streamline your trading approach, this system could be just what you need.
For a deep dive into the system's mechanics, check out the detailed explanation here. Additionally, you can refer to our comprehensive article on system testing in our magazine's April 7th, 2008 issue. Feel free to join the conversation and share your insights on our forum.
Trading Strategy Algorithm:
- Set up four SMAs (Simple Moving Averages) with periods of 5, 20, 40, and 60.
- Use the M30 chart for the EUR/USD pair, trading with a lot size of 0.1.
- Implement a Stop Loss of 60 pips on the EUR/USD pair.
Buying Conditions:
- Enter a buy when the SMA 40 crosses above the SMA 60.
- Close the position when the SMAs cross in the opposite direction.
Selling Conditions:
- Enter a sell when the SMA 40 crosses below the SMA 60.
- Close the position when the SMAs cross back in the opposite direction.
Here's a quick look at the testing results on the EUR/USD M30 chart with standard settings (Stop Loss: 60 pips, no Trailing Stop or Take Profit):
After tweaking the strategy by adding Trailing Stop and Take Profit features to the EA, we conducted further optimization:
Here are the testing results on the EUR/USD M30 chart post-optimization (for the same period):
You can also check out a forward test beyond the optimization period in our magazine's April 7th, 2008 issue.
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