Multi-Time-Frame Operating Example USD/JPY RSI Spotting Range Gains
Hello!
Well then, this time we looked into USDJPY for July and August 2016 and examined an operating example across multiple time frames.
This is the risk-reward-focused RSI-based method for USD/JPY.
There are methods that emphasize win rate over width by prioritizing small losses and large gains, but
here we summarized the results of investigating a method that uses RSI on USD/JPY to emphasize range capture with small losses and large gains.
The win-rate-focused version using RSI with small losses and large gains can be viewed onthis page.
The test results are based on period-specific data, so it cannot be said that this will continue to be the case in the future, but
we hope you grasp the impression from the test results that “this approach has a high potential to be profitable.”
First, please look at USDJPY 4-hour movements in July and August.
With this movement, there are only a few points where you can capture the range.
In a movement where it is hard to catch the trend, can you still capture the range with mechanical trading? What trading rules were effective?
This time we tested the combination of RSI and moving averages.
Test results (MT4 report (2 months starting with 1,000,000 yen))
Balance chart (2 months starting with 1,000,000 yen)
In two months of range-capture trading, the number of trades is relatively small.
Trading 50,000 units
+270,000 yen
6 wins, 1 loss (win rate 85%)
That was the test result.
The trading rules are as follows:
1. Determine the trend by the slope of the 5-minute MA with 135 bars
Since there is no clear long-term trend, we judge the trend on the 5-minute chart!
2. The 100-bar moving average on the 1-hour chart should not be crossed by the rate
If a cross occurs, there is little room to capture the range.
Since this is multi-time-frame, we are using the 1-hour chart on the 5-minute chart.
3. Buy with RSI on the 1-hour chart from 35 to 40, sell from 65 to 60
Because the trend MA uses the 5-minute chart, we open the 5-minute chart, but
on the 5-minute chart we use the 1-hour RSI and the 1-hour moving averages.
4. New trades are allowed from 9:00 to 1:00
In the range-capture test, new entries from 1:00 to 9:00 were excluded.
I think this depends on the period.
5. Take profit at 95 pips, stop loss at 30 pips, no weekend hold
Weekend positions are closed automatically at 5:00 on Saturday.
An example of a long entry according to the above trading rules
An example of a short entry according to the above trading rules.
In markets where trends are hard to grasp, a method that enters a bit early using long-term indicators and relatively short-term moving averages can also be effective,
this was the case.
Also, the indicators used this time areTrend-following pullback-buy indicator MT4RSIMA Pullback-kun
The EA used wasTrading Rule Creation Support Tool MT4RSIMA Pullback-kun EA.
With the Trading Rule Creation Support Tool MT4RSIMA Pullback-kun EA, actual automatic trading can also be performed.
Lastly, from a human psychology perspective, it seems easier to sustain actual operations by prioritizing win rate with small losses rather than chasing range with small gains,
because it is hard to predict how long the trend will continue and people want to secure profits as soon as possible.
When you hold a position, expectations and anxieties mix, and it is natural that you cannot wait for the range to appear.
Ideally, you would want both high win rate and large gains, but that is difficult!
Well then, please stay well!
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Publisher: Art Brain Products
Contact: Satori Mind
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