2 Stochastic POP Trading Systems From Jake Bernstein

FX:EURUSD   Euro / U.S. Dollar
Two Systems Revealed Directly From The Creator - Let's Talk Trading Systems.

I spoke to Jake Bernstein and asked if he had any updates to his Stochastic POP Trading Method. At the bottom of the page is a PDF Jake published a while back (Please read for basic rules, which also Includes a New Method). I’m Labeling the Original method Stochastic Pop Method 1, and the other method Jake discusses in the PDF as Method 2.

Jake Bernstein will be a contributor on TradingView when Back Testing/Strategies are released. Jake is one of the Top Trading System Developers in the world with 45+ years experience and he is going to teach’s community how to create Trading Systems and how to Optimize the correct way.

Jake asked me to share that he has Updated Stochastic POP Method 1 Recently. Now across all symbols he has found the Stochastic Values of 60 and 30 to be the most profitable. NOTE - This can be Significantly Optimized for certain Symbols/Markets.

Below I will List Backtesting Results for both Method 1 and 2. A Daily Chart of the EURUSD is used only as an example.

The point is to simply show soon we will be able to:
  • Find These Results Ourselves on when Strategy/Back Testing capabilities are released.
  • To Show How Simple Optimizations can Significantly Change the Results of a Trading System.
    BackTesting Results Example: EUR-USD Daily Chart Since 01/01/2005

Strategy 1 Stochastic POP Method 1:
Go Long When Stochastic Crosses Above 60. Go Short When Stochastic Crosses Below 30. Exit Long/Short When Stochastic has a Reverse Cross of Entry Value.

Total Trades = 164
Profit = 50, 126 Pips
Win% = 38.4%
Profit Factor = 1.35
Avg Trade = 306 Pips Profit

Strategy 2 Stochastic POP Method 1:
Rules - Proprietary Optimization Jake Will Teach. Only Added 1 Additional Exit Rule.

Total Trades = 164
Profit = 62, 876 Pips!!!
Win% = 38.4%
Profit Factor = 1.44
Avg Trade = 383 Pips Profit

Strategy 3 Stochastic POP Method 1:
Rules - Proprietary Optimization Jake Will Teach. Only added 1 Additional Exit Rule.

Winning Percent Increases to 72.6%!!!, Same Amount of Trades.

Two Important Items to understand about Stochastic POP Method 2.
  • To code the rules precisely we need a function that will be available when Strategy Capabilities are released on TradingView.
  • There is one of Jakes Profit Maximizing Strategies that needs to be integrated with this code…which again we need the Strategy based Function that will be coming soon.

Strategy 1 – Stochastic Pop Method 2 System:
Go Long When Stochastics below 50 and Crosses Above 55. Go Short When Stochastic is above 50 and Crosses Below 45. Exit Long/Short When Stochastic has a Reverse Cross of Entry Value.

Total Trades = 151
Profit = 40,758 Pips
Win% = 37.1%
Profit Factor = 1.26
Avg Trade = 270 Pips Profit

Strategy 2– Stochastic Pop Method 2 System:
Rules - Proprietary Optimization Jake Will Teach. Only Added 1 Additional Exit Rule.
Total Trades = 151
Profit = 60,305 Pips
Win% = 37.1%
Profit Factor = 1.38
Avg Trade = 399 Pips Profit

Similar to Strategy 3 listed above in Method 1 we can turn this system in to a 75% win rate but the profits decrease significantly.

Multiple Key Metrics Jake uses when evaluating a Trading System were not included. These will be introduced by Jake.

I was going to list several observations as to why the two systems have a different amount of trades during the same period, and why Method 1 was more profitable…But I’d like to see what you guys think first…

Leave a Comment Below With Your Thoughts…I have a Feeling This Thread Will Introduce Some Important Topics.

Link To PDF:
Hi Chris
The file does not exist in the Dropbox link. Looks like i am way too late here. Appreciate if you could kindly re upload and post the link here.
Thank you for sharing the above strategy.
+8 Reply
It's seems to be a great system, thank you!! But let me know from where can I download these two indicators mentioned above? Please let me know as soon as possible.
Thanks for sharing. This is looks very good. How I could back test this trategy? Only draw and wtach the chart. Have you got a simplier method? Thanks.
+1 Reply
Is the backtesting available for subscribers only or everyone? Thanks.
For trading system learning 2 books are pretty good: one by Davey, the other by tomasini.
Then capital, patience and a lot of errors coding ;)
All the best to Chris with the new venture. Looking forward to learning more about new ideas / strategies in the future
My analysis on eurusd:
Thanks for sharing, Thumbs Up :)
I tested and backtested those methods manually on several Forex pairs. My conclusion is as follows: they often give the wrong signals, but it is enough to compare with standard MACD to eliminate most of them. If POP method gives signal and MACD line just sharply crossed signal line or approaching 0 signalling potential price turning point/fast PA, winning percent increases to 70-80%. But if POP indi gives signal but MACD is flat/still in the same direction/lines don't cross - you should ignore POP signal. Yesterday I ran it even on 5min charts and found POP method perfect as an alert tool that draws your attention to specific chart few minutes before fast PA starts and after it ended and correction begins. Thanks a lot Chris for sharing this idea.
+2 Reply
IanLip Jeff_Wheelwright
Jeff, thanks for testing and the info, if what you tested is correct and if I'm understanding what you wrote, than for example GPRO is now a buy, correct? POP is green & MACD just crossed 0 ... anyway, will be interesting to see.
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