Historically-tested forex trading systems: This set bundles all the Currency System Analysis articles that appeared in Currency Trader magazine in 2006 and 2007. Each article includes the in-depth back-testing and analysis used in all the Active Trader Magazine Group's publications. Some systems are tested on a basket of currencies, while others are tested on specific currency pairs.

Note: These articles are designed to show the good, bad, and ugly of trade ideas. As a result, back-testing results in some articles may indicate a system or trade idea is likely to be unprofitable.

You can purchase this article collection for 30% off. The price listed is the discounted price.


ARTICLE 1: "Narrowing breakout channels" (Currency Trader, January 2006)
This system narrows a breakout channel to attempt to get in on a move before the rest of the market. For example, instead of waiting for price to cross its highest or lowest points over the last 20 days, this system enters at the second highest or lowest level. The system uses two indicators called HighestN and LowestN that return the nth highest or lowest price within any look-back period.

ARTICLE 2: "Inverse Martingale rule" (Currency Trader, February 2006)
The following system tests the inverse of the "Martingale" rule, a position-sizing method that doubles the size of the next trade if the current one is unprofitable. The inverse Martingale rule is a pyramid approach that doubles the position size each time a certain profitable move occurs.

ARTICLE 3: "Trend Strength indicator" (Currency Trader, March 2006)
The Trading System Lab in the August 2005 issue of Active Trader magazine introduced the Trend Strength indicator, which was designed to define trend strength and direction. The indicator compares the current closing price to several simple moving averages (SMAs). The greater the number of averages below the current closing price, the higher the indicators value and the stronger the uptrend. The greater the number of averages above the current closing price, the lower the indicators value and the stronger the downtrend. This test applies the tool to the forex market.

ARTICLE 4: "The Trend Strength Crossover Indicator" (Currency Trader, April 2006)
The Trend Strength indicator measures the trend by comparing price to simple moving averages (SMAs) of different lengths (10 days, 20 days, etc.) — an idea tested in the March issue of Currency Trader. This system uses the "The Trend Strength Crossover indicator," which compares different moving average values to each other and counts the number of times various moving averages have crossed over each other.

ARTICLE 5: "Channel Midpoint indicator" (Currency Trader, May 2006)
This system uses two Channel Midpoint indicators based on different time frames. The rules are similar to a standard moving-average crossover system: The system goes long when the shorter-term Channel Midpoint indicator crosses above the longer-term Channel Midpoint indicator and goes short when the opposite occurs.

ARTICLE 6: "Correlated currencies" (Currency Trader, June 2006)
Various currencies are highly correlated, especially those that trade against the U.S. dollar. This system uses one currency as an "indicator" to trade a second, highly correlated currency — i.e., it takes buy and sell signals from one currency and applies them to the other. The analysis also compares whether these signals create better trades if they’re based on the original currency or the correlated currency.

ARTICLE 7: "Composite ROC system" (Currency Trader, July 2006)
This system generates signals using a variation of the rate of change (ROC) indicator which calculates the percentage change between the current price and the price n bars ago. The idea is that new trends can be signaled when this percentage change climbs above or drops below certain thresholds.

ARTICLE 8: "HLR breakout" (Currency Trader, August 2006)
Typical channel breakout systems go long when price hits an x-day high and go short when price hits an x-day new low in hopes the trend will continue. However, such approaches usually detect trends quite late and thus give up a large part of their profits.

This system tries to address this problem by entering positions a bit before price actually penetrates a breakout level. The tool used to do this is the HighestLowestRange (HLR) indicator, which shows prices relative location within the high-low range of the past x bars.

ARTICLE 9: "Outside bar opportunity system" (Currency Trader, October 2006)
This system is derived from the article, "Trading the Euro inside out" (Currency Trader, September 2005), which analyzed the performance after both inside and outside bars in the Euro. (Single-currency system test.)

ARTICLE 10: "Intraday CMO-FX" (Currency Trader, November 2006)
In his book The New Technical Trader (John Wiley & Sons, 1994), Tushar Chande introduced the Chande Momentum Oscillator (CMO), a momentum indicator that ranges between +100 and -100 and has default overbought and oversold levels of +50 and -50, respectively. The Trading System Lab in the December 2003 issue of Active Trader magazine incorporated a daily CMO in the equity market. This test applies a 14-period CMO on intraday forex data (2,500 hourly bars).

ARTICLE 11: "Kiwi dip catcher" (Currency Trader, February 2007)
Like the "Outside-bar opportunity system" published in the October 2006 issue of Currency Trader, this strategy is based on daily outside bars (a day with a higher high and lower low than the previous day). However, this system turns typical outside-bar interpretation on its head. (Single-currency system test.) Purchased separately, these 11 articles would cost a total of $49.50. You can buy the entire collection as a single PDF file for $34.65 — that’s 30% off.