I just finished another round of testing with excellent results. I tested support an resistance trades on the EURUSD 4 hour chart. Starting with $10,000 I ended with $15,118.84 from 2001 to 2008. Not a huge return on a yearly basis but profitable nonetheless. See my Forex Tester screen below:
Some things that I learned from this round of testing:
- Don’t fight the trend, when all three moving averages are going in the same direction, don’t fade the trend.
- Use ‘open’ support and resistance points on the 4 hour to determine support and resistance levels.
- I should be holding on to winners much more than I have been doing.
- It seems like I can expect a 40/60 win/loss ratio with this pair.
- 1000 pips is the longest run that I can expect on the 4 hour chart.
- Taking profit at about 50 pips seems to work pretty well.
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