Exactly two weeks ago, on the pages of comparic.com, I presented the MA AO Stochastic strategy. This strategy is based on three standard indicators, which should be found on every web platform or MT4. These indicators are:

Moving average – change period to 12, other settings unchanged
Awesome Oscillator – run with standard settings
Stochastic Oscillator -% K with a value of 12,% D and Slowing with a value of 3.

For the last two weeks I have published partial statistics showing the daily rates of return that could be achieved by investing on the basis of this strategy. As announced, the time has come to recap and check whether this strategy would allow to earn and whether it is worth making investment transactions on its basis.

As I conducted the tests on a 5-minute interval with a 15-minute option expiration period, the statistics refer only to the 4 most-popular currency pairs in the hour. 8: 00-16: 00:

AUDUSD
EURUSD
GBPUSD
USDJPY

When investing on other instruments or at any other time of the day, separate tests would have to be carried out. This experiment aimed to verify whether this strategy has any basis to be profitable and whether it is worth devoting its time to its detailed testing and trading based on the signals it generates.

During the past two weeks (10 sessions), between 8:00 and 16:00, on the observed currency pairs the MA AO Stochastic strategy generated a total of 189 signals. 101 of them turned out to be profitable and 88 lossy. This means that the effectiveness was 53.44%. Taking into account the rates of return on investments, which at the uTrader broker range between 76% and 81% in total, by making 189 transactions, we could lose 9.76: 1.

During these two weeks, five sessions turned out to be profitable and five not. The biggest daily loss was 7.16: 1 and the biggest daily profit was 2.69: 1.

The only profitable currency pair was the EURUSD pair, on which we could earn 5.44: 1. The most, as much as 12.24: 1 could be lost on the currency pair USDJPY.

I would not consider this strategy to be unambiguously lossy. I feel huge potential in it and maybe a small optimization will help to improve statistics.

During the tests, I noticed that many of the potentially profitable signals did not meet the basic assumptions of the strategy. Exactly the fact that one of the elements conditioning the signal was that the Awesome Oscillator should move around 0. In strong trends, however, we observed this indicator moving in large range. In connection with the above, I decided to test the strategy that overrides this oscillator in the next two weeks.

A detailed description of the modified strategy with examples of transactions is available in a separate article.


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