My Best EUR/USD FX Engine: 3994 Pips

I thought I'd share the recipe for the best EUR/USD engine I've come up with for trading on FX Engines. It relies on timing of market activity in this currency pair to help identify high-probability trades. In over three years of backtesting on historical data it racked up 3994 pips, or around 1300 pips a year. Here's how to put it together if you'd like to take it for a spin. [Register here to set up your FX Engines account if you don't already have one.]

First you'll have to create a new signal in the Breakouts signal menu with the following parameters:

Name: whatever you like
Signal interval: 60 Minutes
Signal type: Entry
Signal activates: choose option 3, and complete with the following numbers:
Price breakout below the low minus 5 pips for the last 1 periods

Now just hit Save at the bottom and you're done and ready to use this signal in your engine.

Next find your way to the Create an Engine page and enter these parameters to create this engine.

Name: Whatever you'll remember

Currency Pair: EUR/USD

Trade Direction: Long

Entry Signal: Select the signal you just created from the menu.

Entry Settings: Market Entry

Entry Schedule: Select the last option and choose 2:00 AM through 3:00 AM EST for every day of the week listed. Yes, this is only an hour window of time - my research indicates that, curiously enough, a downtrend in this period correlates to an uptrend for that day.

Exit Settings: choose the Fixed Stop & Limit Exit option, with 75 pips as the fixed stop, and 160 pips as the limit exit.

Now just scroll past all the other options to the bottom and hit the Finish button, and you're done and ready to backtest your engine. Backtesting is a crucial step to make sure you've entered all the parameters correctly, and that I'm not just making this all up at random. You can run your backtests in the Testing section of the site. My tests of this engine ran for a date range of 01/01/03 - 03/24/06.

If you do end up trading with this engine, just keep in mind that while it certainly performed well in backtesting, there's no guarantee it'll continue to trade profitably in the future. Trade at your own risk!

Related topics:
My Best GBP/USD FX Engine
Divergence FX Engine

Related links:
FX Engines Home Page
FX Engines Registration