Cowabunga System Final Review

After 12 weeks of forward testing, the Cowabunga System achieved a net 27.9% return:

cowabunga system performance return

Annualised, this works out to a 111.68%​ return after 12 months. 

Now ​I should preface this by mentioning that past performance does not guarantee future returns... but given what I've experienced in the past 12-week of testing, my opinion is that if you put some work into it, the Cowabunga System is almost certainly a profitable one.

Here's a chart showing​ the percentage gain/loss for each of the 88 trades taken over the past 12-weeks:

trade gains and losses

Cowabunga System Forward Test Statistics

Win rate: 61.4%

Average trade profit: 1%​

Average trade loss: -0.9%​

A few final notes and pointers:

  • On numerous occasions, the market price initially moved in my direction before reversing and stopping out a trade. I would have gotten much better results if I'd shifted the stop loss to the entry price after the market moved in my direction.
  • Interestingly, this system seems to be mostly unaffected by news announcements. In fact, I had a few winning trades based on price surges following them. This might be worth looking into.
  • I noticed that a significant number of losing trades could have been easily avoided if I skipped taking trades when the 4h moving averages were converging (but still showing a trend). Of course, this means that I would be taking fewer trades, but anecdotally, I'd say that the system would be overall more profitable. 

Is the Cowabunga System worth following?

I would say yes, most definitely. With a positive winning percentage and a larger average win compared to the average loss, this system has a positive expectancy based on my experience with it.

Assuming that the statistics I've collected are representative of the Cowabunga System, a trader can only screw up by over-leveraging his trades and going through a prolonged drawdown period.

​On the whole, I would give the this system two thumbs up and would recommend it to anyone who looking to be a trend following day trader.

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