The Trading Rush MACD / 200EMA System
If you like to scour the interweb for new trading systems to experiment with, then you'll have probably found your way to YouTube, and if you've found your way to YouTube then it won't have been long until you've found the Trading Rush channel. AND, if you've found that, then this system needs no introduction.
The MACD system which capitalises on pullbacks in the direction of the trade, using MACD and 200 EMA.
He tests many systems through 100 trades to get a good indication of how well a system performs - this system has been on top of his leaderboard for months now. The aim of his channel is to make the point that lots of systems will make money if traded consistently. He also demonstrates beautifully how to layer/incorporate edges into your trading approach.
I would ALWAYS encourage anyone considering a new system to not only thoroughly explore the backtesting already carried out, but to also test it yourself manually. I've experimented with this system myself and got similar results to him when backtesting on EUR/USD, AUD/JPY and GBP/USD. My win rate was slightly lower, around 55%, but it was still a nice system with manageable drawdown. I was going to post my own backtesting results here, but I really want to encourage you to just open your chart and go through using either Trading Rush's app, a Google Sheet, or a cool app like Forex Tester. My favourite part of this system is how it avoids a lot of false signals by not allowing a trade to open unless the MACD cross occurs beneath the 0-level (histogram) in the direction of the overall trade.
I went to the liberty of paying a chap to code the system for me for MT4 and MT5, as well as had my own go at coding a more basic version for ProRealTime.
To save everyone from having to try code it themselves or pay someone else, consider this my gift to you. Consider subscribing to the blog for more charitable acts of awesomeness, such as this one!
Here are the files:
MT4 & MT5
Side Notes On This System
- There is a setting in this system where you have the option to also include a higher time frame check. This will use the 8/21EMA cross on the daily to determine whether the market is trending up or down.
- The Stop Loss is positioned using x pips above/below the last fractal.
- The code is set to actually take half profit when trade reaches 1:1 and then move stop loss to break even, but you can change this to suit your own style.
The code for ProRealTime isn't anywhere near as customisable. Instead I just experimented with trial and error on backtesting different pairs and timeframes to find the best results for how many set pips to use for SL and TP.
I traded it on the 15-minute charts for EUR/USD and GBP/USD and 30 minute charts for AUD/JPY.
// Definition of code parameters DEFPARAM CumulateOrders = False // Cumulating positions deactivated // The system will cancel all pending orders and close all positions at 0:00. No new ones will be allowed until after the "FLATBEFORE" time. DEFPARAM FLATBEFORE = 090000 // Cancel all pending orders and close all positions at the "FLATAFTER" time DEFPARAM FLATAFTER = 200000 // Conditions to enter long positions indicator1 = ExponentialAverage(close) c1 = (close > indicator1) indicator2 = MACDline[12,26,9](close) indicator3 = ExponentialAverage(MACDline[12,26,9](close)) c2 = (indicator2 CROSSES OVER indicator3) indicator4 = MACDline[12,26,9](close) indicator5 = MACD[12,26,9](close) c3 = (indicator4 < indicator5) IF c1 AND c2 AND c3 AND Not OnMarket THEN BUY 3 PERPOINT AT MARKET ENDIF // Conditions to enter short positions indicator6 = ExponentialAverage(close) c4 = (close < indicator6) indicator7 = MACDline[12,26,9](close) indicator8 = ExponentialAverage(MACDline[12,26,9](close)) c5 = (indicator7 CROSSES UNDER indicator8) indicator9 = MACDline[12,26,9](close) indicator10 = MACD[12,26,9](close) c6 = (indicator9 > indicator10) IF c4 AND c5 AND c6 AND Not OnMarket THEN SELLSHORT 3 PERPOINT AT MARKET ENDIF // Stops and targets SET STOP pLOSS 50 SET TARGET pPROFIT 75
Side Notes On This System
- To edit the risk parameters just tweak those two values right at the bottom that read 50 (for SL) and 75 (for TP).
- Use ATR if you'd like a more dynamic risk.
- I've set this to place £1pp stake as the default, you'll need to adjust for your own risk management principles. I'd recommend 1% risk of total equity per trade.
- This code closes out all trades at 20.00 GMT, and will not reopen trades until a signal is triggered after 9.00 GMT.
Not all backtesting software is accurate or consistent. You have to always account for the spread on the asset you're testing, and in some cases ensure you're using 'tick data' for a more accurate reading.
Also remember to adjust for the right stake/contract sizes for proper risk management.
Before you use any of these, please backtest the system for yourself manually. Not only do you have more confidence in any system after doing this, but you get to learn way more about the intricacies of each approach and you "become one" with it ;-) It's just better alright??!!
I think as far as day trading systems go, this is a decent one if you stick to it religiously. I've traded it myself, but it's not really 100% suited to my own style and so I don't trade it currently.
If you liked the blog and you downloaded the files, then please drop a comment of 'thanks' below, consider subscribing to the blog for more updates and posts and maybe even share on social or with your mates.