The strategy is based on identifying overbought and/or oversold
moments for the market entry. To do this, momentum indicators like RSI
and ADX are used. At the same time, it is verified that the market in
the long and medium term has a compatible trend with the entry type
(BUY/SELL), for this purpose different moving averages are used with
varying timeframes (1 hour, 4 hours & daily). The strategy is
multi-instrument, this version is using the EUR/JPY & EUR/USD pairs
(plus GBP/USD in the second strategy, see below), but future versions
could use more & different pairs. The strategy uses money management
to determine the trade volume, but allows the entry of a fixed volume
thus disabling money management. The strategy is selective in terms of
the time to trade. This version includes a second strategy inside the
main strategy, it is a trend strategy on the GBPUSD pair and uses Mov
average (H1), RSI and the last candles to trade following the trend,
it trade only when the main strategy does not trade, is symmetric of
course, but is very strict and could do very little or even no trades
during the month, the SL:TP ratio of this strategy is 9:5. Finally,
the strategy also uses a martingale to try to recover from a loss.
Version 2 fix an error in the setting of the SL and TP when the
martingale is activated. The StopLoss:TakeProfit ratio of the main
strategy is 9:1 except if the martingale is used. The strategy was
designed exclusively for the Dukascopy Strategy Contest in May 2015,
so will not work correctly in a different period. Remember that the
use of a copied strategy violates the (4.d) section of the official
contest rules (RCR).
Version 3 contains the names change of all the variables upon request
from JForex contest team, and a modular design for a better
understanding of the strategy by the observer (a description of the
functionality of each module is provided through a personalized note).