Tuesday, June 5, 2012

ADX scalping system

I've spent this weekend backtesting a new "dumb" ADX scalping system. You basically set the ADX to 3 periods, based on median price. You enter on the break of the candle whenever +DI and -DI cross, with your SL placed on the opposite end of the candle. No regard is paid towards things like resistance or trend. Like I said, dumb.

My sample size is only 200 but so far the results are quite good. I've tested the GBPJPY from 1996 to 2000 on the  daily timeframe so far. Optimal reward-to-risk seems to be 1.67R, which offers an expectancy of 0.15R per trade.

What I really like about this system, though, is the abundance of opportunities. On the GBPJPY alone, I'm averaging about one trade per week. Trades don't usually last for very long either. Throw in some more currency pairs, and you can probably trade ten times per month on the daily timeframe. I'll update my findings once I finish backtesting the GBPJPY and, if expectancy is still positive, optimise the system.


  1. Why you don't stay on simple system.....like before?? Price action.....i see you have link for Nial Fuller and Johnathon Fox, maybe you look for Chris Capre.
    Your blog is nice to read!!

    Bye from EU

  2. Keep up the good work Kevin! love reading your blog. MW

  3. Hi Clemens. I think price action works, but at the moment I'm just exploring and testing new concepts.

    But I will look up Chris Capre. I haven't heard of him before. :) Thanks for visiting!


Note: Only a member of this blog may post a comment.