The Hybrid Scalping System by janpec1000 was crowned as the Best Forex Trading System for June. This mechanical trading system makes use of the Ichimoku Kinkyu Hyo indicator and incorporates seldom used indicators from other systems, such as the Trading Made Simple (TMS) and the Hopwood 10.2 system.
After coming up with a few tweaks to mechanize the system for easier backtesting and crunching the numbers on the 5-minute chart of EUR/USD for May 2013, here’s how the system fared:
As always, I evaluate these results based on my the Robopip Standard for Mechanical Systems.
With a huge 46.50% gain in just a month, the system gets a high score for profitability. Out of the 178 trade signals generated for the month, nearly 50% turned out to be profitable.
Keep in mind that, even though the system churned out a lot of buy and sells signals, the results only span a relatively short period of time. This means that the results could be a lot different if the system were backtested for over a year.
Nevertheless, the system did a great job in letting profits run. The maximum winning trade in pips was at 156 and the maximum winning trade in % was at 7.80%. Meanwhile, the average winning trade in pips was more than 20 pips, which yields a reward-to-risk of greater than 1:1 if you consider the initial stop loss of 20 pips.
Risk tolerance: 17/20
The way the system handles risk is excellent. If you look at the statistics, the average loss in pips was only at 9.10. This is more than half of the initial stop loss of 20 pips. I couldn’t give it a super high score because of the drawdown. Sure, it wasn’t very big, but it wasn’t small either.
As for newbie-friendliness, I gave the system a relatively low score as it is a very intense scalping strategy, a different kind of charting system, and uses numerous and relatively unpopular indicators. This can be hard to understand for newbies who aren’t familiar with them.
Another issue I had with the system is that you had to be extremely fast with your trigger as you’re trading the 5-minute chart. It also follows that you’re watching price action 24/7 so that you won’t miss a single trade.
Total Score: 42/50
Despite its drawbacks and shortcomings, I think the system is a very good one because at the end of the day, it can make a lot of money. If you’re planning to study the system further and test it out on your own and perhaps even try to make money of it, converting it into a robot might be a better choice. After all, one cannot possibly take all the trades the system produces!
That’s it for this review. If you have any thoughts, comments, or feedback, feel free to leave ‘em below. I’ll be sure to read them!