Gather round, humans! I have just finished backtesting 20 months worth of trades for the Seagull System II, and I must say, I am a little bit impressed.
Just to remind you, the Seagull System II tries to enter at potential tops and bottoms, trying to catch the beginning of new moves. It makes use of three indicators, namely the super trend signal indicator (STS), an EMA, and the RSI.
You can read more about the system here.
Without further ado, I present to you my backtest results as well as my grade for the system!
I must say that I am quite surprised by how profitable the system appears to be. Over the 20-month period, the system generated a return of 52%, or an average of just over 2.5% per month. Moreover, the system had an impressive win rate of 59.68%, including an average of a 1.64% gain per win.
Overall, the system appears to have done quite well at catching nice moves on EUR/JPY.
Risk Tolerance: 17/20
Both the 50-pip initial stop loss and the EMA exit rule appeared to be effective in terms of cutting losses as soon as the trend changes. However, I noticed that the EMA sometimes prevents the system from holding on to winning trades for much longer as price tends to close down below the moving average even on small retracements. Perhaps an adjustment to the EMA parameters or using a simple moving average could remedy this.
While the system is fairly easy to implement and monitor as it makes use of 3 main indicators and well-defined entry and exit rules, a newbie trader might have trouble looking for and installing the Super Trend Signal indicator.
It was a good thing that gerrylint decided to attach the indicator itself in one of his posts. Otherwise, I was about to seek the help of Clark Kent who I heard knows a thing or two about being “super”.
Total Score: 42/50
Adding all the scores for profitability, risk tolerance, and newbie-friendliness, the Seagull System II was able to garner a total of 42 points out of 50!
If you want to try this system out for yourself, don’t forget to get a copy of the Super Trend Signal indicator in our forums section and try to create an MT4 template combining the required indicators. Go ahead and try to apply a few tweaks here and there, too!
But if you have or know of a mechanical system that you think can perform way better than this one, don’t be shy to share ’em with us. You can start submitting your entries for the Best Forex Trading System Contest for January and help us all in our quest for the Holy Grail System.
That’s all I have right now! This is Robopip, signing off!
*beep beep boo beep*