Forex System Rules: Amazing Crossover (Version 2.0)

Thanks to the constructive feedback I’ve gotten on my recent review of the Amazing Crossover system, I decided to run another round of tests with a few tweaks involved.

Here are some of the suggestions I’ve seen so far:

  • Apply the Amazing Crossover original system rules on the 4-hour time frame instead of the 1-hour chart
  • Use the parabolic SAR for exits instead of sticking to a standard 100-pip initial stop and profit target
  • Base the stops and targets on the pair’s ATR
  • Add the MACD as an additional filter along with the RSI

Ideally, I should be running one change at a time to see if it does result in any improvements in the results. The question is, which one should I start with?

Come to think of it, applying this system on the 4-hour chart could help me backtest on a much longer time period, as my memory chip is able to store historical data on EUR/USD’s 4-hour price action all the way back to January 2013. This could give me at least a year’s worth of data to crunch the numbers!

However, I might need to look into tweaking the stops and targets to better suit the time frame I am looking at. I’m thinking this is where the parabolic SAR or ATR should come in, as these could make the exits more appropriate for the 4-hour time frame. For now, I think I’ll just stick with the default parabolic SAR settings to make things less complicated.

I’m less inclined to add another filter for trade signals, as I believe the RSI already does an excellent job of discarding entries that pop up when the market is range-bound. With that, I now present to you the Amazing Crossover v2.0 with the following rules:

  • Buy at the open of the next candle when the EMA 5 crosses above the EMA 10 while RSI 9 moves above 50.
  • Sell at the open of the next candle when the EMA 5 crosses below the EMA 10 while RSI 9 moves below 50.
  • Initial stop of 100 pips, 20-pip trailing stop, close trade when parabolic SAR makes three dots above/below price.

With the 20-pip trailing stop, I think the system can still be able to minimize risk as price moves in the trade’s favor, yet the PT using the parabolic SAR could allow the trade to be kept open for much longer and maximize wins.

Next week, I’ll have the results up for my backtests from August 1, 2013 to August 1, 2014 so y’all better stay tuned!

  • srchcool

    Using ATR to adjust targets/stops is a good idea. Parabolic SAR is a bad idea. Having hard TP and SL is also a bad idea. The targets/exits should be price action based. The entry should be a combo of price action (your crossover maybe) and fundamentals. 4H candles have a flaw that they differ from broker to broker depending on the broker time but yes, 4H is better than 1H. Also I hope you are using good data for testing and a good MM. Plan for error in your testing scenario – adjust profitability by 20% because as we know in real world things often turn out differently.

    EDIT: Test at least 5 years back if not 10.

    • Javinopa

      I´m a newbie but I´m been trying it the last few days, so I
      suggest when activate signals, to trade in favor of the daily trend, having
      also care with support and resistance levels and pivots points, and the entry
      point using the 30 min chart, I mean trading like any other system that is
      three time frames: the major trend: 1day
      chart, the signals: 4H entry point: 30 min chart. Thanks.

  • gerald

    Hi, new here, long time stock trader, new to forex. I use almost exact system trading stocks so been using it with forex. In my limited experience seems the stop loss and trailing stop are cruical with this system. Am I right the initial stop is adjusted once trade moves 20 pips in your favor? The initail 100 or ATR pip stop then becomes 20 pip trailing stop loss?

    I been using daily chart, does the 4 hr or 1 hr perform better? Sorry if I missed that already

  • Disparity

    There was a setup on the eur/usd following the original system today on the hourly chart.
    Anyone else?

    • Robopip

      Yep looks valid, did you take it?

  • chio

    just entered this trade now i think its bit late.any suggestion

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  • somi

    hello robopip… pls help with your new profit making tips.. am very new to this blog.. joined just today… new to trading also…

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