August 28, by Hugh Kimura. In my search for excellent trading strategies, I keep an open forex and review as many methods as I can. This strategy caught my eye, so I thought that I would document the testing process here on the blog. This will be a three part divergence. In this first part, I will explain the trading method and show you how to setup the forward and back test. The second part of the series will show my results from cci testing. Finally, the third part of the series will evaluate how to possibly improve on the results. I'm not sure if this method will work or not, but that is why we test. The great thing about this method is that it is available publicly, so I can show it to everyone and you can do your own tests. I've tried to make this post as detailed as possible so you feel comfortable doing it yourself and so you can apply the process to other strategies that you come across. The CCI Divergence Breakout Strategy is courtesy of Urban Forex. It is a trading community created by Navin Prithyani that is based on a core set of Forex trading forex. Their trading methods are provided for free as a lead for their Forex Watchers training website. The first thing you need is a testing plan. Here are the parameters for my first test. You can test on any pair or any time frame above divergence 15 minute according to the Urban Forex websitebut I want to provide a concrete place to start, so I forex picked a specific time divergence pair. As the name suggests, this is a strategy that looks for divergence between price and the CCI indicator. For a long entry, price must be trending upwards and CCI must also trend upwards, then bounce. After a CCI bounce, divergence the lows cci price with cci trendline. Once price breaks the trendline, wait for a retest of the trendline from the underside. Look for a closed candle that bounces to enter the trade. Do the opposite for a short trade. I will cci chart examples of both long and short trades at the end of the testing plan. The Urban Forex site says to set the stop, depending on how steep the trendline is. The steepness of the trendline can really depend of how your chart is setup. Since I'm not a big fan of subjective rules like this at least not on the first testso I'm going to set a rule that is going to use the more conservative stop. Therefore the stop will go one pip above the nearest swing low, for a long. At the close of each candle, move the stop to one pip below the low of the last candle, for a long. The longer term target for the second lot should be the next 00 or 50 level. This should be at least a 1: The first profit target should be at 1: If there is less than a 1: If the first profit target is hit, then exit at the nearest 00 for Otherwise, stay in the trade until the stop is hit. Since this trading method is so simple, it is easy to setup a backtest. Open your favorite backtesting software. I use Forex Tester 2, so I'll use that as the example. If you want to see how to setup your first Forex Tester backtest, read this tutorial. Once you setup your backtest, come back to this post to see how to test this strategy specifically. When you see a trade setup, first calculate your stop loss. If it is not, don't take the trade. Follow the rest of the rules outlined above for each trade. Use a risk spreadsheet to calculate the number of lots to trade. You can create one yourself, or you can download one below forex free. If you want to create one yourself, here is the calculation. First, figure out your maximum dollar loss, based on a percentage of your account. Then calculate the cost per pip, based on the lot size that you set up above. This is based on a lot size of 1, currency units. If this is confusing, just follow my settings and do a test. You will start to get a feel for the numbers. Also compare your results in backtesting to the results in your demo account. That will help you adjust your backtesting settings, if necessary. Multiply your cost per pip by the number of pips of risk. So if your stop loss is pips, your total dollar risk by your cost per pip. In this divergence, that means the following. So you should trade 5 lots in this example. The calculator spreadsheet in the download section will help you do this easily or you can create one yourself. Now do that same thing in your broker's cci platform. Since most people use Metatrader, I'll use that as an example. Add it to the Daily chart of the pair you backtested and monitor the signals. Next, setup a free account with MyFxBook. This website will connect to your demo account and collect your trading results. Follow their documentation to connect your account. It will give you reports that tell you things about your trading results that would otherwise take a long time to do manually. To learn how to use MyFxBook, watch this video. Click on the button below to download the Risk Calculator Spreadsheet and Strategy Template for backtesting. It will make it easier for you to do your tests. Once you have everything setup, you are ready to start testing. Keep in mind that you should test this method on as much data as possible. The more data you have, the more likely the strategy will work in different market conditions. So if this strategy interests you, get started right now! Regardless if you have backtesting software or not, everyone with a computer can start forward testing right now. Everything you need is in this post, you have no excuses. In the next part of this series, I will show you the results of my testing. Stay tuned to find out what happens. If you want to subscribe to blog posts via email, you can subscribe at the bottom of this page. If you would like to take a publicly available trading strategy from a forum or blog, test it, then write about it, feel free to contact me. I may feature your test here on Trading Heroes. I do get a cci if you buy through some of the links on this page. But it does NOT cost you anything extra, it helps pay for my hosting costs and a portion of the proceeds go to my charity partner. Hi, I'm Hugh Kimura and my goal is to create a full-time income, trading Forex. If that is your goal too, then I invite you to join me on the journey. I will uncover what works and what doesn't Click here to follow me on Twitter. All information is for education purposes only and is not investment or trading advice. Your email address will not be published. Notify me of followup comments via e-mail. You can forex subscribe without commenting. Trading currencies or any other financial market involves substantial risk, and there is always the potential for loss. Your trading results may vary. No representation is being made that any associated advice or training will guarantee profits, or not result in losses from trading. Neither the products, any explanation or demonstration of their operation, nor any training held in conjunction therewith, including, without limitation, through blogs or forums, in conjunction with any advertising and promotional campaigns should be construed as providing a trade recommendation or the giving of investment advice. All content on this website is for informational purposes only. Before deciding to invest in foreign exchange or any other financial marketyou should carefully consider your investment objectives, level of experience, and risk threshold. You could sustain a loss of more than your initial investment. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent certified financial adviser if you have any doubts. Start Here Resources Products Blog About. But before we get started, here are a few things that you have to understand… Why I Am Writing These Posts My goal is NOT to discredit any of these trading methods that I feature. I'm done trying to expose scams. I strongly believe that it is a much better use of my time to uncover excellence. The methods I feature are strategies that I feel have a good chance of being profitable systems. I want to bridge that gap with these posts. Instead of jumping in with real money in the beginning, these posts will show you the safe way to get started. To stimulate meaningful discussion from people who trade these methods with real money. I want to uncover the best trading methods in the world. Deconstructing and writing about trading methods helps me understand them much better. Keep These Things In Mind Of course, past performance does not guarantee future results I don't have any affiliation to this strategy. The only things I know, I have read from their website. Backesting and demo trading is much different than trading real money Even if you give the exact same trading system to 10 traders, you will get 10 different results. That is the nature of trading. Not all trading methods are testable. Very discretionary systems are difficult to test and some are downright impossible. If a trading method is more discretionary, testing might not be an accurate measure of its profit potential. I only test methods that are provided for free on blogs and forums. I do not take strategies out of paid courses. All information is for educational purposes only. It is not trading or investment advice. Now that we have that out of the way, let's get down to it. Presenting The Urban Forex CCI Divergence Breakout Strategy The CCI Divergence Breakout Strategy is courtesy of Urban Forex. First, we need a plan. Here are is the testing plan for this strategy. Testing Plan The first thing you need is a testing plan. Commodity Channel Index CCI14 period Time Period: Conservative Entry As the name suggests, this is a strategy that looks for divergence between price and the CCI indicator. Stops The Urban Forex site says to set the stop, depending on how steep the trendline is. Profit Target Use two lots. Exit If the first profit target is hit, then exit at the nearest 00 for Examples Here is what a long trade would look like. This is a cci trade example. How To Setup A Backtest Since this trading method is so simple, it is easy to setup divergence backtest. Next click on the List of indicators icon to add an indicator. Then add the CCI indicator to the EURUSD chart. Make sure that it is set to 14 periods. How to Setup A Forward Test Now do that same thing in your broker's trading platform. Downloads Click on the button below to download the Risk Calculator Spreadsheet and Strategy Template for backtesting. Risk calculator spreadsheet — Calculate the proper lot size for each trade Backtesting worksheet — Divergence down your plan so you don't deviate from it. Conclusion Once you have everything setup, you are ready to start testing. What were your testing results? Share them in the comments below. The 7 Unconventional Rules of Forex Forex Traders. Related Forex Backtesting Results: Leave a Reply Cancel reply Your email address will not be published. Academy Resources Products About Contact.
Безопасный форекс - Стратегия форекс CCI Divergence Trend Line
Безопасный форекс - Стратегия форекс CCI Divergence Trend Line
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An emphasis is placed on systems engineering concepts and principles as they support effective human systems integration as part of the DOD acquisition process.