Gambit trading strategy was originally designed for trading on D1 time interval. But it turned out that the signals received on h4 timeframe also had sufficient reliability. The strategy used only one indicator to receive signals to enter the market – Bollinger bands.
There are several modifications of the strategy which along with the Bollinger bands use additional filters for entry, but the usefulness of such an innovation is questionable. Therefore we’ll review the basic version (written by Walter T.Downs).
The basic idea of the strategy is to identify the perfect moment to enter and take the greatest possible subsequent price movement. Since the probability of success of the deal is large, its volume also increases in comparison with other trading strategies.
The author recommends to constantly monitor developments over several pairs, it will allow to somewhat increase the frequency of the deals. When trading on D1 during the week with one currency pair, the strategy allows to make at most 1 deal.
Gambit EA: rules of trading
Unfortunately, the Gambit EA can’t be found in free access. Several homemade options of the EA simply refused to run. Perhaps the Gambit EA can’t be found in free access due to the fact that the trading strategy is designed for large time intervals.
Bollinger Bands indicator is used in trading with the following parameters: period 30, deviation 1 and 2 (for Bollinger Bands 1 and 2, respectively). To enter the market, several conditions must apply:
For a deal to buy/sell the average line of the indicator should be rising/falling for 10 days.
Warning candle should touch a midline indicator with its shadow. In this case, the closing price must be above/below the midline of the indicator (for deals to buy/sell, respectively).
Closing price of the signal candle should be in the upper/lower part of the candles range.
SL is placed above/below the minimum/maximum of the signal candle.
After 4 days of trading, the SL moves to a breakeven. The deal closes after the price reaches the target level – the top line of the indicator, or after 3 days of inactivity. It is not recommended to hold a position open for more than 14 days.
Gambit EA: testing the basic strategy
Since the working Gambit expert advisor is not yet available in free access, the test was performed manually. The basic strategy suggested by Walter T. Downs was taken as the base, additional filters from some versions of the strategies were not used. Given the large timeframe, testing was carried out since the beginning of 2013.
As the author warned, the strategy has an extremely low number of deals. Within 1.5 years of following the rules, only 5 deals were made, of which 1 was unprofitable. In the meantime, the total profit amounted to 1212 points (average 67.33 points per day).
The performance of the strategy was studied only on 1 currency pair, and the results can be described as acceptable. Perhaps, if you simultaneously trade on 9-10 currency pairs, the frequency of deal and profits will increase. The results of the manual testing showed that the idea has the right to exist. To increase the frequency of the deals, the same approach can be used on h4 timeframe, choosing the appropriate settings of the Bollinger Bands.Social button for Joomla