Awesome SMA Strategy (M1) – summary of tests
Exactly three weeks ago, on the pages of comparic.com I presented the strategy of Awesome SMA. This strategy is based on two standard indicators, which we can find on each web platform or MT4. These indicators are:
Simple Moving Average – SMA100
Awesome Oscillator (default setting)
For the first two weeks I ran the tests on a 5 minute interval with a 25 minute expiration. Statistics were conducted on the 4 most popular currency pairs in hours. 8: 00-16: 00:
AUDUSD
EURUSD
GBPUSD
USDJPY
Investing in other instruments or at other times of the day should be carried out separately. This experiment was designed to verify whether this strategy has any basis for profitability and whether it is worthwhile devoting time to its detailed testing and trading based on the signals it generates. After two weeks, it turned out that the Awesome SMA generated a total of 113 signals on our currency pairs, which would allow us to earn 9.76: 1.
In the meantime, however, suggestions have been made to test this strategy on a 1 minute interval with a 5 minute expiration. I made one week test and now came time for a summary.
During the past week (5 sessions), between the hours of 8:00 and 12:00, on the observed currency pairs, the Awesome SMA (M1) strategy generated a total of 137 signals. Only 65 of them turned profitable and as many as 72 lost. This means that the efficiency was at 47.44%. Taking into account the return rate of investment that uTrader brokers rated 73%, we could lose as much as 24.55:1 in 137 transactions.
This means that risking at every position of 1% of capital, within a week we would lose as much as 24.55% of our deposit.
During this week only one session was profitable and 4 with losses. The biggest daily loss was 9.24:1 and the biggest daily profit was 1.06:1.
The only profitable instrument was the EURUSD currency pair.
Conclusions:
As it turns out, even a banal change like a change of time interval may prove to be significant. By investing in an Awesome SMA strategy at a 5 minute interval with a 25 minute expiration, we would earn 9.76: 1 within two weeks. By investing exactly the same strategy on the same instruments but on a 1 minute interval with a 5 minute expiration, we would lose 24.55: 1 within the week.
Therefore, it is important to take into account not only the different instruments but also the different time intervals.
