I spent the latter half of today backtesting the USDJPY from the years 2000 to 2009, using the same three black crow / three white soldier candle pattern I identified in the previous post.
The results aren't quite so positive. A reward-to-risk ratio of 2 provides a meek positive return on risk, and higher reward-to-risk ratios return negative results. I've provided a comparison between the USDCAD and USDJPY below.
Overall, I would say that this strategy is viable with a reward-to-risk ratio of 2. Because of such a large stop loss, this strategy will require you to keep your trades open for weeks to provide a 2x reward.
The results aren't quite so positive. A reward-to-risk ratio of 2 provides a meek positive return on risk, and higher reward-to-risk ratios return negative results. I've provided a comparison between the USDCAD and USDJPY below.
Overall, I would say that this strategy is viable with a reward-to-risk ratio of 2. Because of such a large stop loss, this strategy will require you to keep your trades open for weeks to provide a 2x reward.
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