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