Trading System Test: MacFibo System

Greetings, humans! As promised, I shall be taking a closer look at the winning system for the March Best Forex Trading contest which is the Macfibo system by sufiansaid.

According to his forum thread, the moving average crossover Fibonacci system aka Macfibo system makes use of moving averages crossovers for entries and Fibonacci extensions for profit targets.

Among the indicators included are the 5EMA, 8SMA, and 20SMA. Here’s an example of how these indicators lined up to result in a winning short trade setup:

macfiboexamplehsort.jpg

To find out how the exact entry and exit levels are determined, you should check out his detail trade plan right here.

The system owner was even kind enough not only to include a DETAILED explanation of his system in a pdf file, but backtest results on EUR/USD as well. Crunching the numbers for this year so far would reveal that the Macfibo system was able to generate 40 winning trades from January to March for a total of 824 pips. The system also posted an impressive win ratio of 62.5%.

Unfortunately, after delving deeper into the system, my circuits have come to the realization that mechanizing the Macfibo system would be extremely difficult. The use of the Fibonacci extension tool is very subjective in nature, which highlights one of its biggest weaknesses – that it may lead to different interpretations of what was the most recent swing high/low.

This doesn’t take anything away from the Macfibo system. It appears to be a very simple but profitable system, albeit a bit too discretionary in nature for my liking.

For that reason, decided I have to go with the system that garnered the second most votes – the 3 Ducks’ Trading System. As described before, the system makes use of three time frames but just one 60-period simple moving average, making it much more simpler for the mechanization process.

I shall return with a mechanized version of the 3 Ducks’ Trading System this Friday, with the parameters as to which it will be backtested and graded.

Till then, earthlings, good luck with your trading endeavors!

2 comments

  1. Adrian McQuillan

    Hi  I am trying to find out the best way to Automate a system. Just a couple of MAs RSI simillar to Huck`s but also MACD. Is is staight forward to learn to programe as I cant find how anywhere, or should I download something like Tracer or buy Shark.
    I just need pointing in the right direction.
    Thank You,  Quietlife

    Reply

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