Trading System Test: Amazing Crossover System

Take me to your lea…

Whoops. Wrong recording. That’s supposed to be for a different planet. Let’s see… Ah, here’s the correct one.

Greetings, earthlings!

I am Robopip, the newest member of the BabyPips.com family. With the help of Forex Ninja and the other cool BabyPips.com humanoids, I will find the Holy Grail of Trading Systems. Short and easy the quest is not, but I’m prepared to embark on this journey if only to help humans evaluate different forex trading systems.

For this month, I will test the Amazing Crossover System made by ForexPhantom. It won September’s Trading System of the Month contest and it looks very promising. As usual, I will post the backtesting results, and then grade it on three factors: profitability, risk tolerance, and newbie-friendliness.

After using my “Instant Scan” feature on the system, I can now tell you that the system is designed to catch trend formations early. It is heavily reliant on the EMAs, which, unlike the SMAs, give more weight to the most recent periods. Meanwhile, the RSI, the other main feature in this system, is also designed to confirm trend formations.

Purely mechanical this system is not, so I decided to adjust it to make it more “mechanized.” After a few tweaks here and there (no, I’m not talking about myself), I now present to you a mechanized version in the Amazing Crossover System:

Indicators:

EMA (5) – Yellow
EMA (10) – Red
RSI (10) – Applied to Median Price

Time Frame:

1-hour

Currency Pair:

Any pair will do, but I will use EUR/USD in my backtesting.

Entry Strategies:

  1. BUY at the crossover candle if the 5 EMA crosses the 10 EMA from the bottom AND RSI crosses the 50 mark from the bottom.
  2. SELL at the crossover candle if the 5 EMA crosses the 10 EMA from the top AND RSI crosses the 50 mark from the top.
  3. For backtesting purposes, I will risk 1% of account balance per trade

Exit Strategies:

  1. Set profit target 100 pips away from entry level.
  2. Initially set stop loss 100 pips away from entry level, but immediately move stop loss to break even once the pair moves in your favor by 20 pips.
  3. If price goes your way, move your stop to break even after 20 pips and then trail it every succeeding 20 pips. For example, your stop loss should be locked in with a 20-pip profit once you’re ahead by 40 pips and locked in a 40-pip profit if you’re ahead by 60 pips.

My backtesting of this system will cover a few months, so I will retreat into my pod for a while to make sure I do it correctly. Next week I will unveil the results to the earthlings.

Remember, robots are never late.

So, are you interested in this system, human? If you are, don’t think twice about leaving a comment or contacting me through the following channels:

Twitter (@Robopip)
Facebook (The Art of Automation)

  • Nima

    I love this system because of its frequent signals! You just make this strategies into experts? Or you try to make them better? I am trying to write an expert system based on this strategy, but I found that entry and exit points need some adjustments, as well as moving averages periods and also RSI period. For exit point, I’m thinking about ATR, not just the constant number “100″ as this is not going to work on all pairs. For example 100 pips is to big for USDJPY and is too small for XAUUSD (gold). With adjusted parameters, this system could be used on other time frames, even M1! And an important filter I noticed for entries is about RSI. When saying “RSI crosses 50 mark from top”, top should be really considered as “TOP” not just “Above”, this can reduce the risk I believe. Looking forward for your analysis!

  • Pipmaestro

    the best strategies involve the moverage average crossover systems. heres a very good video on youtube about the experiences of a forex trader and his learnings. one of the best videos i have ever seen.its quite long but.
    link to youtube.com

  • Priyal

    I like ur Strategies, and i m doing the same from last 2 years.but i have a question What About MACD and Stochastic oscillator?

  • andrew

    I created an EA for this, as its quite simple. Since September 2011 it posted a profit, though not a huge one. When I backtest from 2003 onwards though, it loses $60k from a $100k account using a risk of 1% per trade.

  • Muneesh

    I have been trading the Amazing Crossover System on the demo over the last couple of weeks with mixed results. I look forward for your analysis…Cheers!!.

    • robopip

      Greetings, Muneesh!

      I hope I can provide a good analysis in the next couple of weeks. But remember, earthling, that I made a few changes from ForexPhantom’s original version. I am testing the “mechanized” version of the system.

      “Cheer!”

  • Jeff

    Hi Robo,

    I was wondering, do you manually backtest or do you use some automation?

    Thanks!

  • Mattbrun

    Nice and simple, but maybe too simple?  This was the very first trading strategy I ever learned, could it possibly still work?  What’s unique is the recommended stops, I would have just thrown a trailing stop on there and been done with it.  I’m actually really interested in the results.  Thanks.

  • Joshua Pearce Gibson

    Domo arigato.

    • robopip

      Mr. Robo…pip? Ha. Good one, human.