Hello, earthlings. It is I, Robopip, and I have come to deliver the results of my CCI Coral Breakout System backtest.
Before you read on, I advise you to first read my previous post to know what parameters I used to backtest the system. I would also like to reiterate that I tweaked some of the original rules of the CCI Coral Break Out System to eliminate subjectivity. Hopefully, the results that I end up with more or less matches with yours.
Without further ado, below are the results. The system was backtested for around 3 months, from July up to the first week of September. Take note that there is a high possibility that my backtest results can be different from yours due to price feed discrepancies.
The system may seem extremely profitable at first glance, but note that I did not include the spread in my backtesting. The spread, which can be around 2-3 pips for EUR/JPY for some brokers, can cut into the net pips gained by as much as 50%, assuming that each trade had a 2-pip transaction cost.
However, even if you factored in the transaction cost, you can still clearly see that the system would have been profitable.
I give the system 15 points for profitability.
Risk Tolerance: 17/20
The CCI/Coral Breakout system is quite impressive in limiting losses. It has a 25-pip stop in place, but upon backtesting it, it barely got triggered. There were very rare instances when trades got stopped with a full 25-pip loss and these happened on extremely volatile moves when price reversed immediately after getting triggered.
Travelkoen’s rules about exiting on new crossovers and when CCI hits +150/-150 were crucial in minimizing losses.
Seventeen points for risk tolerance.
For the most part, I was able to backtest the system because of my newly-upgraded, super-fast dual core processor. But I can imagine keeping tabs on the 5-minute timeframe to be a daunting task for some human forex newbies.
Not to mention, the CCI and Coral are also “non-mainstream” indicators which could easily confuse people.
Total Score: 38/50
Taking into consideration the system’s profitability, risk tolerance, and newbie friendliness, I have awarded the CCI/Coral Breakout System with a grade of 38/50.
While it’s not Holy Grail of mechanical trading systems, it’s definitely a good system to try out. It’s profitable and has a low tolerance for risk. I think it’s an excellent system for scalp traders who are risk averse.
But of course, these are only based on the Robopip Standard for Mechanical Systems. I urge you humans to go forth and test it on demo accounts. See the results for yourself!