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Monday, June 24, 2024

50-200 Moving Average Crossover Strategy v1 Backtesting Results

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In a previous article, I showed you how to create a fully automated 50-200 moving average crossover trading strategy, without coding.

Now I’m going to show you the backtesting results of that strategy for every market that I’ve tested.

I’ll show you both the good and bad.

You have to backtest this strategy yourself to make sure that you’re comfortable with it and that it actually works with your broker.

Even if a strategy doesn’t work well, you can test ideas on how to improve it and make it much more profitable.

Now let’s move on to the trading plan and the results for each market.

Remember: This is only a starting point for YOUR trading strategies. This is for informational purposes only and the results below will not guarantee successful trading. 

As I backtest new markets, I’ll add the results to this page.

Bookmark this page and check back periodically if you want to get future updates.

The 50-200 Crossover Strategy Trading Plan

Moving Average crossover on chart

Here are the rules for this plan:

  • Buy
    • Buy when the 50 SMA crosses above the 200 SMA
    • Stop Loss at last swing low
    • Risk 1% per trade
    • Take profit a 1R (1 times risk)
  • Sell
    • Buy when the 50 SMA crosses below the 200 SMA
    • Stop Loss at last swing high
    • Risk 1% per trade
    • Take profit a 1R (1 times risk)

Be sure to read the full 50-200 Moving Average Crossover automated strategy tutorial to learn how I did these backtests in just a few minutes, without coding.

Backtests

EURUSD

Weekly Chart

On this timeframe, there isn’t enough data to pursue this strategy.

With only 10 trades, you simply won’t get enough trades to make this viable.

EURUSD W 50-200 Crossover

Daily Chart

This actually looks pretty good.

True…the return is very low, but the max drawdown is also low and the strategy stayed profitable throughout the entire test.

So this could be a good strategy to optimize, or trade in multiple markets, assuming that the results are favorable in those markets too.

No guarantees obviously, further testing would have to be done.

EURUSD D chart 50-200

4-Hour Chart

This strategy was profitable for most of the testing period, so this could be a good timeframe to start experimenting with.

Yes, the return was breakeven.

But the graph is more promising than most of the others on this list.

It executed 209 trades, which is decent.

If this works in other markets, then the combined return could produce a significant return.

Again, backtest this for yourself.

This is only meant to be a starting point.

EURUSD 4-hour results

1-Hour Chart

The return on this strategy was breakeven, so there is potential to possibly optimize this timeframe.

On the upside, the strategy did execute quite a few trades.

EURUSD 1-hour 50-200 moving average crossover results

30-Minute Chart

The results on this timeframe are not worth examining further, at least with this version of the strategy.

EURUSD 30m

5-Minute Chart

The results are terrible on the 5-minute chart, so no further analysis is necessary.

EURUSD 5min backtesting results

Notes and Observations About this Strategy

So far, the lower timeframes are showing much worse results.

Therefore, it might be better to stick to the daily and 4-hour charts.

Also, the stop loss on this strategy may not be ideal.

Sometimes the stop ends up being too far away and it takes awhile for price to hit the target.

More testing and optimization would have to be done.

Learn how to build and tweak this strategy and test your own ideas and you might come out with better results than me.

Conclusion

So that’s how this strategy stacks up in all of those markets.

I’ll be adding new backtests as I do them, so be sure to bookmark this page and check back periodically to see if I have any new markets.

Remember that you should always backtest a strategy for yourself. 

Never rely on the results of others, including me. 

To learn exactly how I created an automated program to do the backtests above, WITHOUT coding, read this tutorial.

 





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