Harmonic + Price Action Backtesting Verification

I am using this serial publication space to announce a new product related to harmonic patterns.

We have started selling an indicator that displays the planned lines before harmonic detection.
Thank you very much for your great feedback ^^

Display harmonic appearance locations in advance
Pre-Harmonic Display Indicator
This is intended to complement the harmonic pattern detection indicator.
Please note that it does not retain alert functionality or display detected harmonics.

Harmonic pattern detection and display require a separate indicator.
The indicators we sell are here. A trial version is also available. Please see the page below for details
Automatic detection of harmonic patterns in MT4!
Harmonic Pattern Detection Indicator
We conducted backtests on harmonic patterns and harmonic plus price action.

Here are the results.
To simplify the effects, we used an extremely simple position strategy.

■ Harmonic only
When a harmonic appears, we cut the position with a ±50 pips limit.
If a harmonic in the opposite direction appears, close all positions and re-enter.

Currency pair		EURUSD (Euro vs US Dollar)
Period		1 hour (H1) 2013.01.02 09:00 - 2016.12.29 23:00 (2013.01.01 - 2016.12.30)
Model		All ticks (the most accurate method using the smallest available time frame)
Parameters		Sep00=""; MagicNumber=86290001; IsCountdong=false; SpreadFilter=5; Lot=0.1; Slippage=1; MaxPosition=10; Comment="Gewinn9"; Sep01=""; MaxProfit=50; StopLoss=50; MaxOpenBars=240; IsTrailing=false; TrailingStartPips=100; TrailingPips=50; IsBreakEven=false; BreakPips=20; UnRepeatPosition=4; Sep10=""; OpenHarmonicType=-1; LowHighBars=4;
Test bars	25750	Model ticks	71993250	Modeling quality	90.00%
Discrepancy chart error	0
Initial margin	10000.00			Spread	20
Net profit	-212.83	Total profit	13579.86	Total loss	-13792.69
Profit factor	0.98	Expectancy	-0.37
Absolute drawdown	1275.12	Maximum drawdown	1448.05 (14.23%)	Relative drawdown	14.23% (1448.05)
Total trades	568	Short positions (win rate %)	285 (53.68%)	Long positions (win rate %)	283 (49.82%)
		Win rate (%)	294 (51.76%)	Loss rate (%)	274 (48.24%)
Maximum		Winning trades	51.24	Losing trades	-56.69
Average		Winning trades	46.19	Losing trades	-50.34
Maximum		Winning streak (amount)	9 (386.93)	Losing streak (amount)	9 (-449.07)
Maximum		Winning streak (trade count)	386.93 (9)	Losing streak (trade count)	-449.07 (9)
Average		Winning streak	3	Losing streak	2

■ Harmonic + Price Action
If price action occurs within 48 hours after a harmonic appears, we take a position.
Price action is filtered only by moves of four times the ATR.

The ±50 pips condition is the same.

Currency pair		EURUSD (Euro vs US Dollar)
Period		1 hour (H1) 2013.01.02 09:00 - 2016.12.29 23:00 (2013.01.01 - 2016.12.30)
Model		All ticks (the most accurate method using the smallest available time frame)
Parameters		Sep00=""; MagicNumber=86290001; IsCountdong=false; SpreadFilter=5; Lot=0.1; Slippage=1; MaxPosition=10; Comment="Gewinn9"; Sep01=""; MaxProfit=50; StopLoss=50; MaxOpenBars=240; IsTrailing=false; TrailingStartPips=100; TrailingPips=50; IsBreakEven=false; BreakPips=20; UnRepeatPosition=4; Sep10=""; OpenHarmonicType=-1; LowHighBars=4;
Test bars	25750	Model ticks	71993250	Modeling quality	90.00%
Discrepancy chart error	0
Initial margin	10000.00			Spread	20
Net profit	890.68	Total profit	3922.99	Total loss	-3032.30
Profit factor	1.29	Expectancy	6.10
Absolute drawdown	218.13	Maximum drawdown	292.73 (2.71%)	Relative drawdown	2.71% (292.73)
Total trades	146	Short positions (win rate %)	73 (60.27%)	Long positions (win rate %)	73 (56.16%)
		Win rate (%)	85 (58.22%)	Loss rate (%)	61 (41.78%)
Maximum		Winning trades	51.24	Losing trades	-57.80
Average		Winning trades	46.15	Losing trades	-49.71
Maximum		Winning streak (amount)	7 (336.67)	Losing streak (amount)	3 (-156.69)
Maximum		Winning streak (trade count)	336.67 (7)	Losing streak (trade count)	-156.69 (6)
Average		Winning streak	2	Losing streak	2

This has the effect of increasing the win rate.
The number of trades is about one third, isn’t it?
However, the graph shows a rising right tail, suggesting the effect may be real.
Regarding the low number of trades, even if it does not form price action, an algorithm that targets ATR multiples pullbacks seems to be effective.

Also, I set the parameters without optimizing anything, but optimizing them seems to balance around +90 pips of profit and -50 pips of loss.

■ Harmonic + Price Action
Backtest results with profit target of 90 pips and stop loss of 50 pips to maximize profit and minimize loss.

Currency pair		EURUSD (Euro vs US Dollar)
Period		1 hour (H1) 2013.01.02 09:00 - 2016.12.29 23:00 (2013.01.01 - 2016.12.30)
Model		All ticks (the most accurate method using the smallest available time frame)
Parameters		Sep00=""; MagicNumber=86290001; IsCountdong=false; SpreadFilter=5; Lot=0.1; Slippage=1; MaxPosition=10; Comment="Gewinn9"; Sep01=""; MaxProfit=90; StopLoss=50; MaxOpenBars=240; IsTrailing=false; TrailingStartPips=100; TrailingPips=50; IsBreakEven=false; BreakPips=20; UnRepeatPosition=4; Sep10=""; OpenHarmonicType=-1; LowHighBars=4;
Test bars	25750	Model ticks	71993250	Modeling quality	90.00%
Discrepancy chart error	0
Initial margin	10000.00			Spread	20
Net profit	1322.42	Total profit	4996.46	Total loss	-3674.04
Profit factor	1.36	Expectancy	9.06
Absolute drawdown	163.91	Maximum drawdown	390.36 (3.79%)	Relative drawdown	3.79% (390.36)
Total trades	146	Short positions (win rate %)	73 (52.05%)	Long positions (win rate %)	73 (47.95%)
		Win rate (%)	73 (50.00%)	Loss rate (%)	73 (50.00%)
Maximum		Winning trades	92.28	Losing trades	-57.27
Average		Winning trades	68.44	Losing trades	-50.33
Maximum		Winning streak (amount)	7 (484.70)	Losing streak (amount)	6 (-299.11)
Maximum		Winning streak (trade count)	484.70 (7)	Losing streak (trade count)	-299.11 (6)
Average		Winning streak	2	Losing streak	2

The free indicators published on the blog “Studying to win FX on MT4” are available from this list.
Indicator list

Please also follow us on Twitter.
https://twitter.com/mt4program