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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Cowabunga System Week 12 Results

This was another difficult week for the Cowabunga System, as there were plenty of false breakouts and whipsaws in the GBPUSD.

I was honestly a little concerned since last week was a losing one, and I was wondering if this week might follow suit,

Other the the regular news announcements, we'll be seeing the ECB interest rate decision and the press conference afterwards. While no one expects any major interest rate changes, the market expects the ECB to at least remain dovish.

During the press conference, ECB chairman Mario Draghi indeed delivered a dovish statement, but the market reaction surprised everyone. In particular, the EURUSD and GBPUSD rallied 100 pips and 120 pips respectively, before reversing their gains within the next hour.

Such was the volatile trading condition​s this week.

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Cowabunga System Week 11 Results

This week was packed with important news events from both the UK and US, with the most important being the UK interest rate announcement on Thursday.

GBP

  • ​CPI
  • Official Bank Rate
  • Monetary Policy Summary

USD

  • FOMC Member Dudley Speech
  • PPI
  • Retail Sales
  • CPI
  • UoM Consumer Sentiment

So... did this week turn out to be another profitable one for the Cowabunga System?

Unfortunately, no​.

Due to the many whipsaws in the GBPUSD,​ the system suffered its biggest losing week since the forward test began.

But how big was the loss?​

Read on to find out...

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7 Forex trading tips for beginners who want to earn extra income

If you’re a beginner trader, you probably got started with Forex on the premise that you might earn some side income.

And that’s actually the best place to get started, since it would take at least a few months to train up your trading skills. Meanwhile, having a regular job ensures that you can pay for your daily expenses.

The first thing you need to know about Forex trading is that the challenge lies not in making money, but in preventing yourself from losing a lot of money.

After all, making $2,000 in a week of trading is pointless if you lose $3,000 the next week.

  • So the first tip, if you’re looking to earn extra income with trading, is to focus on keeping your losses small.
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How to open a demo account in MetaTrader 4

Demo accounts are a great way to get started with Forex trading, especially if you’re looking to test trading strategies without risking any capital.

Thankfully, the MetaTrader 4 platform makes it very easy to open a new demo account, and you can typically open as many as you want.

To get open a demo account, follow these step-by-step instructions:

1. If you already have the MetaTrader 4 platform, open it. If not, download it from any reputable Forex broker, or from the MetaQuotes website.

2. At the top menu bar, click on ‘File’, then ‘Open an Account’. Your MT4 platform will then pull up a list of servers provided by your broker.

3. Select the demo server you wish to open a demo account in, and click ‘Next’.

4. In the next window, select ‘New demo account’ and click ‘Next’.

5. You will then be prompted to fill in a few details, including the Account Type, Deposit currency, Leverage, and (demo) Deposit amount. Finally, select the ‘I agree to subscribe to your newsletters’ radio button and click ‘Next’.

6. Wait a few seconds and your demo account should be immediately set up. Note down your account login number, as well as the account password and investor password.

7. Click ‘Finish’.

Congratulations, you have opened a demo account in MeaTrader 4!

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How to trade the news in Forex trading

All Forex traders have tried to trade the news at some point, because that’s when the big price moves happen.

And the big price moves are where the big money's made… right?

Wrong.

What amateur news traders fail to realise is that the more obvious an opportunity is, the more dangerous it is.

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