• Registered: 2007-09-03
  • Posts: 43

Topic: contrarian investment for consistant profits

In this method you first identify which currency does well against the other. Always go long on the stronger currency.
In the time frame 2006-2007
I used donchian strategy with time frame of 10.
1. enter long positions eur/usd when price crosses 10 day low
2. exit long positions when stock cuts 10 day high
3. Open long positions only

This strategy works whenever there is a general trend. Try the same strategy in 2000 - 2001 when dollar was stronger than euro. Use the same strategy shorting the euro. We end up with a profit every time.

No one seems to analyse the positions year by year, each one is busy giving the total pips, but are all strategies giving consistant pips year after year?

The above strategy does so for all currency pairs having trends, but has problems in a sideways market. sideways market needs a longer time frame of 55 days or so.

happy trading for all

Vivek
India

  • Registered: 2006-12-30
  • Posts: 23

Re: contrarian investment for consistant profits

I assume that we can prune sideway market by means of an ADX filter.
Usually something like that:
Enter the market when ADX is greater than 35
It is a good indicator of a trending market but sometimes its signals come too late.

  • Registered: 2006-12-30
  • Posts: 23

Re: contrarian investment for consistant profits

This:

viswadatta wrote:

3. Open long positions only

leads to profit all trend following systems on a rising market like the EEURUSD

4 Reply by Jar Jar (edited by Jar Jar 2007-09-19 13:27:15)

  • Jar Jar
  • Guest

Re: contrarian investment for consistant profits

I see this system as a contra trend in the intraday scope of view because of opening long at the Lower D.Ch. band and closing at its upper band.
Maybe is better to use RSI as a filter  - RSI drops below 30. In this case we will enter long on an oversold market and the chance for a follow uptrend is higher.

  • Registered: 2007-09-03
  • Posts: 43

Re: contrarian investment for consistant profits

I meant open long pos for sur/usd and gbp/usd. If it is usd/chf then go short for the years 2005-06 and 2006-07. Bet with the rising currency only. Reverse the entry rules-enter at 10 day high and exit at 10 day low. FSB does this automatically without the need to change the rules, just use "Enter short positions only"

  • Popov
  • Popov
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  • From: Bulgaria
  • Registered: 2006-11-30
  • Posts: 7,885

Re: contrarian investment for consistant profits

Vivek the filter "Long or Short" was designed with the sole purpose to give ability for testing a strategy behavior in both market directions.

It is useful to check whether a strategy is enough rigid. For example during an uptrend as eurusd for the last 3 years set "Enter short positions only". This condition eliminates all the factor leading to an overstated result. If the trading system is not losing during this period it speaks that it is enough stable. But the opposite - testing a strategy on an rising market with a filter "Enter long only" will show a heavily overstated result.

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  • Registered: 2007-09-03
  • Posts: 43

Re: contrarian investment for consistant profits

thanks POPOV, but that is what I exactly intend to do, always buy with the trend. This means that I need to assess the trend using fundamental methods first, and then use a technical strategy.

  • Registered: 2007-12-25
  • Posts: 23

Re: contrarian investment for consistant profits

forexer wrote:

I assume that we can prune sideway market by means of an ADX filter.
Usually something like that:
Enter the market when ADX is greater than 35
It is a good indicator of a trending market but sometimes its signals come too late.

Forexer,
have you tried this yet?  Would be nice if subjective featuree of his method could be eliminated successfully.
jerry

  • Registered: 2010-04-07
  • Posts: 1

Re: contrarian investment for consistant profits

very nice thread

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