Profitable Forex Strategy Examples

One of our guest contributors had been doing a lot of automated system design work over the past year. Somewhere along the way, the idea popped up that maybe we should test some classic trading systems that were, at one point or another, claimed to be profitable and see how they really did over the past few years.

 

Strategy Test Results

Backtest of 5 Minute Momo Strategy by Kathy Lien and Boris Schlossberg

Backtest of the Hourly Engulf Bar with an RSI Filter

Backtest of the Modified London Breakout 2015 Strategy

Will these strategies always work?

No matter how strict the backtesting systems may be, the old caveats of backtesting will always remain: "past performance is not necessarily indicative of future results". That disclaimer is more than just fine print below all the articles you find on the internet, it's a reality of the markets that every professional trader has to take into account.

The point of this experiment wasn't to find univerally infallible trading systems or "the holy grail of forex trading" but to take a look at how relatively simple technical analysis driven strategies could have performed in recent history if you had traded them.

In all honesty, we didn't expect much from strategies that had been shared publicly for a decade or more so we were admittedly surprised anything came back positive from this experiment.

For full-time traders, there are plenty of ways to design your own strategies - particularly one that suits your own personality and circumstances as well as it suits the current market conditions - and perform much better than these. We just figured it'd be helpful to show a few simple examples of how it can be done.