Trading System Test: Trend Runner System

Greetings, earthlings! I’m just about ready to begin backtesting the Best Forex Trading System for April 2013ilzalama’s Trend Runner system.

Just a few more tweaks to my flux capacitors and I should be ready to go! In the meantime, I thought I’d take this opportunity to brief you on the system.

For those of you who are still unfamiliar with it, the Trend Runner system was designed to catch mid-term swings with in the direction of the overall trend. To determine market direction, it uses the 200 SMA and a couple of custom indicators – the Super Trend and Barry Support and Resistance.

But what really tickled my circuits was the system’s flexibility. ilzalama claims it can work on any forex pair and even on metals, CFDs, and stocks!

If you want to give the Trend Runner a shot, you can check out the MT4 template that ilzalama so kindly included in his forum thread.

Backtesting Parameters

For the purpose of backtesting the Trend Runner, some rules have been simplified as follows:

Indicators used: 200 SMA, Super Trend, and Barry Support and Resistance

Time frame and pair: EUR/USD 4-hour

Backtesting period: January 2010 to April 2013 (~3 years)

The entry and exit rules that I will use to backtest can be found below. Take note that this is a simplified and mechanized version to provide APPROXIMATE results of the original system.

Entry Rules

  • Long when price closes above the 200 SMA, while also clearing the 50 level. Buy at the open of the following candle.
  • Short when price closes below the 200 SMA, while also clearing the -50 level. Sell at the open of the following candle.

Exit Rules

  • Place a 100-pip initial stop.
  • When price goes 30 pips in your favor, move the stop to entry.
  • When a new Barry resistance or support level is confirmed (price passes through it), move the stop to that new level.

Risk Management Rules

  • 2% risk of the account per trade

In the next few days, I will retreat to my pod to crunch the numbers on this Trend Runner system. Aside from calculating the overall profit and loss, I will also use my high-speed aluminum-alloy processor to churn out the grades for the system based on the Robopip standard for mechanical systems.

I will be grading the system on profitability, risk tolerance, and newbie-friendliness. Bonus points can be given if the system displays outstanding features.

While waiting for the results to be published next week, grab the opportunity to participate in the ongoing Best Forex Trading System contest for May by submitting your entries in this forum thread.

Holy Grail system… Find you, I must!

  • Esteban Gaston Echevarria

    Hi! please have us updated on your tests and automatization!

  • 2+2

    My apologies being critical, but this is actually not the real trendrunner system. SMA crossover is rare, the bulk of the system resides in the re-entries after S/R breakout. Not to mention the key MM ingredient (+1 pip over BE for each 10 pip gained). If you just use the above described rules, the results are unreliable and likely not very positive. I suggest you to implement those key rules (see the appropriate thread), otherwise this test is a waste of time/energies (note: I love your analysis!).

  • skifos

    Did you delete Super Trend from the system in you test? There is no this indicator in your rules? Your entry is based only on SMA?

  • gynexx

    Where are the results of the test?