Welcome, fellow traders! Today, we’re diving into the intriguing world of the BHS trading system, tailored specifically for MetaTrader 4. This strategy hinges on a fascinating observation: round numbers ending in '00' tend to attract traders' attention. For instance, if the EUR/USD pair is hovering around 1.2470 and starts to climb, you'll find most stop orders clustering just a point or two below the 1.2500 mark, rather than scattered around 1.2517. This behavior creates a unique opportunity for us to capitalize on. So, let’s explore how we can leverage this!
If you want to check out the original description of the BHS strategy, you can find it here. For a detailed look into system testing and reports, don’t miss our magazine issue from 12.05.2008. Feel free to share your thoughts and suggestions over on our forum!
Trading Strategy Algorithm
- Step 1: Open the one-hour chart for EUR/USD and set your lot size to 0.1.
- Step 2: Add a Moving Average with a period of 200.
Buying Alert: Place two buy orders when the price is above the Moving Average and crosses below the 'round' price level by 15 pips.
Selling Alert: Place two sell orders when the price is below the Moving Average and crosses above the 'round' price level by 15 pips.
Closing Trades
We’ll exit our trades using a Stop Loss. Simple as that!
After testing this strategy from January 11, 2007, to January 11, 2008, we gathered some interesting results (based on the open price only):
Furthermore, after optimizing the inputs during the same period, we saw the following results from our EA:
For a forward test that goes beyond the optimization area, make sure to check out the article on system testing and relevant reports in our magazine issue from 12.05.2008.
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