System Review – Trend Runner

The results are in! After crunching the numbers on ilzalama’s Trend Runner system, the winner for April’s Best Forex Trading System contest, I found myself extremely impressed.

This particular system uses moving averages and a couple of new indicators, namely the Barry Support and Resistance and the Super Trend. I did make a few tweaks to the original system to make it easier for my alloy processors to crunch the numbers as I applied the mechanical system to a backtesting period of roughly 3 years from January 2010 to April 2013.

Take a look at how the system fared:

trend-runner.png

Profitability: 19/20

I rarely give high scores for profitability, but when I do, it means that the system has really scored impressive gains! For the past 40 months, the system was able to garner a total of 2,486 pips or a jaw-dropping 49.72% in profits. Ka-ching, ka-ching!

Out of a total of 68 trades taken, only 29 ended up to be winning ones while a good bunch turned out to be breakeven trades. While that’s not exactly a bad thing, I think the profitability could still be improved if the system could be tweaked a little to turn these breakeven trades into winning ones as well.

Risk tolerance: 15/20

I found that moving the stop loss after being up 30-pips to be a little too restricting. Yes, it may have held avoid many losses, but given how huge some of the gains were, it wouldn’t have hurt to widen it a little bit to around 50 or 75 pips.

I also think that a 2% risk per trade may be a little big for each trade, especially for noobs. For those of you who are risk-hungry though, 2% may be perfectly fine.

Still, I can’t ignore that it had a drawdown of just 2%. That had my robotic senses tingling!

Newbie-friendliness: 7/10

While the system wasn’t too challenging to backtest, I do think it may take a new trader some time to get acquainted with all the small quirks of the system. For one, it makes use of a couple of indicators that are quite new. Understanding these indicators may not come intuitively for newbies.

Secondly, not having a set take profit point may make the system harder to use for some traders, as they may feel bad when they see pips slipping away. The patience required takes years to master and it may be too much for those who get anxious and nervous.

Lastly, the art of moving stops is also very tricky and some traders may get confused by this. Move it too soon before the candle closes and you risk not leaving enough breathing room for your position. Another possibility is forgetting to move the stop altogether, which will lead to pips getting away.

For these reasons, I don’t find the system to be too newbie-friendly.

Total Score: 41/50

I must say I was pretty impressed with the system, especially with the profitability portion. A drawdown of just 2% over three years? That means that it never had any back-to-back losses!

I do think the system could be altered to make it a little more simpler so that noobs can pick it up more easily.

Why don’t you guys try out the system for yourselves and see how it can be improved? I’m sure that ilzalma would appreciate any POSITIVE criticism. As he says in his post, we are all here to learn and are in search of the Holy Grail!

That said, the search continues! I am now officially opening the Best Forex Trading System contest for May! Good luck humans!

  • disqus_0VdX3Fg9rG

    trade atleast 100 times then show the statistics,,,,

  • Esteban Gaston Echevarria

    Hi Robo! first of all thanks for your analysis! could you please expecify wich pairs you did your anaylisis? I mean is it 14 pairs ILZ trades or just one pair?

    Regards

    • Charles

      68 trades in 3 years. Most probably not trading 14 pairs but maybe “he” or “she” can answer ?

  • Amit Desai

    I am a little confused here. The system returned 49% over 3 years. Thats annual compounded return of 14%. 14% with so much risk isnt that impressive. Good high yield bond funds give 10sih% with way less risk than forex trading.

    Am I missing something in the profitability analysis here?

  • Charles

    Only 68 trades in three years ? It is enough to make any statisctics ?

    Long term holy grail doesn’t exists, please don’t fool newbies : Why ? Because the Forex is a supply / demand market: if you win, someone loose and will adapt itself not to loose again (will you stay loosing if you are on the other side ?) The more you win, the more the market want’s you to loose. It’s a fight where players always react to the others.
    Long term winners are … banks, brokers, etc. As usual, the best business is betwwen suppliers and demanders.
    So what can we expect from all these srategies ? Maybe playing with them for one month or two and then we have to adapt or die (Darwin).