So far, all Volatily Scalp EA that I created is using the Moving Average as a target for the exit. In vs_eurchf and vs_eurocross I use 20 Period Moving Average while vs_eurgbp I use 50 Period Moving Average. This system will provide maximum results if the price moves only among the Upper / Lower channel and Moving Average ..
Actually, with 20 Period Moving average, we could impose the use of Upper / Lower channel as the exit. But unfortunately, it is very often if we wait for prices to penetrate Upper / lower channel, instead of profit that would come less. So when doing testing, I found an exit on the moving average is more profitable than the exit on the Upper / Lower of Keltner Channel.
10 Period Moving Average
This is slightly different if we use a shorter period, in this case 10 Period Moving Average. With a shorter period, this will increase the sensitivity of the moving average. This allows us to no longer put the Moving Average as a place of exit. However, the place for entry can be used as the exit for the opposite position.
I found the use of a shorter period would be very beneficial if used in the major pair. This is what I try to apply on USDCAD pair. Especially since I only use the shorter trading time (22-23) GMT +2, so I think it is wise to maximize the profit from each trade.
Combinations 10 and 20 Period Moving Average
Actually I was a bit hesitant to use this combination. For the first time I tried to use 2 Keltner Channels Indicator simultaneously. This provides 2 variations to place the entry.
The first variation, entry can be done if the price penetrates both Upper / Lower channel. To exit, we have 3 places, 10 Period Moving Average, Upper / Lower of Keltner Channel (10.1) and 20 period Moving Average.
The second variation, entry can be done if the price through the channel up / down Keltner Channel (10.1) while the distance between price and 20 Period Moving Averages is greater than 10 Period ATR. For the exit we can use as the first variation.
This method I use to pair USDCHF and USDJPY and You can see the back test results on my previous post.
Monday, September 14, 2009
Risk Warning
Please note that Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don't trade with money you can't afford to lose.
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