Risk Adjustments: SMA Crossover Pullback Forex System

Greetings humans! After conducting a thorough review of the SMA Crossover Pullback Mechanical Forex System results for Q3 2015, I’ve decided to make a few tweaks.

Mind you, I had to hypnotize some of the FX-men by making them go on a Mr. Robot TV series marathon before I could bend them to my will and convince them to help me with these risk adjustments. If I had my way, I’d also hack into your brain to get your thoughts on this forex system but I’ll just count on you be generous with your feedback instead.

As I’ve observed, the new crossovers seemed to do a good job of closing positions early before the pairs even hit their full stops on reversals. While this is a nice way to cut losses, I’m thinking that I should also include early exit rules to lock in profits as well. I still want to keep the forex system easy to implement so I’ve decided to include a simple trailing stop:

  • Instead of keeping the stop loss static at a full 150 pips away from entry, the system will switch to a trailing stop once price moves 150 pips in the trade’s favor.
  • This way, the stop will be moved to entry for a risk-free trade as soon as the position is up by at least 150 pips.
  • I will no longer feel bad about positions that come within striking distance of the 300-pip PT only to reverse quickly, keeping my emotional outbursts in check as well. Yes, this robot is starting to have feelings, too. Blame it on excessive human interaction.

In my previous blog post, I’ve discussed the possibility of adding another technical indicator that could filter out signals that take place during ranging market conditions. However, I’ve decided against this idea since it might wind up discarding potentially valid signals. Besides, the existing early exit rules seem to be enough to close those positions almost instantly and with minimal losses.

I’ve also got some feedback on throwing fundamentals in the mix but, as I’ve mentioned, my toolbox isn’t really equipped with those discretionary methods. Maybe if I hang out with Big Pippin and Forex Ninja a little longer, then I might soon be equipped with those skills… or I might be able to turn them into robots. Win-win.

For now, the best I can do is to remind those using this system to proceed with caution ahead of top-tier economic catalysts. As for me, I’ll be forward-testing this system once more so stay tuned for my next blog entries!