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:
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!
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!