Ilan 1.6 Dynamic Expert Advisor - Expert Advisor for Bonus Acceleration
The progenitor of all the Ilans, and the ancient but best counselor of the The Martingale method - The number of titles assigned to this development is incalculable. On our forum with enviable periodicity there are offers to sell robots that in one way or another resemble Ilan, and the distinctive feature of such sales is an incredibly beautiful test on history and the absence of its own monitoring. Why? Let's find out!
In fact, the Expert Advisor uses the simplest trading strategy based on two standard technical indicators - RSI (Relative Strength Index) and CCI (Commodity Channel Index). The first one is used to select the direction when opening positions, the second one - for the function of limiting losses.
What is the principle of operation of the Expert Advisor Ilan 1.6 Dynamic
The conditions for opening positions are as follows:
- Sell if the closing price two bars ago was higher than the closing price on the previous bar and RSI above the value of the RsiMinimum parameter (oversold zone).
- Buy if the closing price two bars ago was below the closing price on the previous bar and RSI is below the RsiMaximum (overbought zone).
If the price did not go in our direction, the Expert Advisor opens additional orders (fills) and waits for the correction to occur. Increasing the volume of subsequent orders allows to maximize the breakeven level (the average price of all orders) to the current price, so that even a small correction can close the entire unprofitable series of orders in profit.
This scheme has practically no flaws. The only condition is the presence of an unlimited deposit. All novice traders sooner or later come to this algorithm on their own, due to which a huge number of varieties of this system have appeared in the network.
Since this is a type of win-win strategy (although, in the latest versions there is still a loss limitation), beginners are primarily attracted by the test charts on history. With correctly selected parameters, we get an almost perfect chart of profitability and exorbitant profitability (practically risk-free!).
It is extremely difficult to find long-lived monitoring of Ilan 1.6 Dynamic on real accounts. It is understandable - in the long term, the strategy is doomed to fail. Thanks to this strategy has gained even more popularity, because the huge liquidity of the currency market and the lack of clear restrictions on the size of the maximum bet significantly expands the possibilities of the strategy, compared to the same casino.
Description of parameters of Ilan 1.6 Dynamic Expert Advisor
The most popular version of the Expert Advisor at the moment - Ilan 1.6 Dynamic - was taken for testing. The peculiarity of this version is the use of a dynamically changing range, depending on the market volatility.
LotExponent - lot increase coefficient in a series (the series ends when the total position is closed in profit, after which a new one begins). The lot is calculated based on the size of the initial bet - the Lots parameter. Each subsequent order in the series is calculated based on the size of the previous bet multiplied by the LotExponent coefficient. Example of a series with a coefficient of 1.5 and an initial lot of 0.1: 0.1, 0.15, 0.23, 0.34, 0.51, etc.
You should be very careful when setting this parameter. If the coefficient value is too high, the position will instantly gain critical volume, and you will have no leverage to further control the situation. In this case, even a small price movement not in our direction is enough, and the account will be drained.
DynamicPips - the main innovation in the dynamic version of Ilan. The parameter enables dynamic change of the distance between the knees. That is, when true, the EA decides when the next order should be placed (relying on the DEL parameter). When false, the knee size will always be equal to DefaultPips.
Ideally, this function should have a positive effect on the adaptability of the Expert Advisor to trading conditions. So, if you are using the dynamic version, it makes sense to leave this parameter enabled.
DefaultPips - distance in points between deals. The smaller the value of the parameter will be set, the more often deals will be opened.
A higher value of the parameter allows you to experience prolonged trends. A small value, in turn, allows you to get more profit from channel movements (flat).
Glubina - number of candles for volatility analysis. The Expert Advisor calculates how much the price has traveled for the specified number of bars (the difference between the maximum and minimum price value for the period) and divides the resulting value by the DEL parameter value.
The minimum distance value is limited by DefaultPips divided by DEL. The maximum is DefaultPips multiplied by DEL.
DEL - works only when the DynamicPips parameter is enabled. Responsible for changing the initially set step in DefaultPips.
Slip - maximum slippage size when opening orders (in points).
Lots - size lot of the first trade in the series. This is the main trading lot, the Expert Advisor returns to it every time a profitable series is closed.
Attention! When setting the initial lot, take into account the total volume of subsequent trades! It is not recommended to use too high a value in combination with a high LotExponent coefficient and a small range size. In this case, the position will gain critical volume too quickly and the account will be instantly drained.
Lotdecimal - the number of decimal places in the lot value. The value may vary depending on the type of trading account and trading conditions of your broker. For example, if you have set the Lots parameter value equal to 0.01 - Lotdecimal should be equal to 2. If Lots = 0.5, Lotdecimal should be equal to 1.
TakeProfit - the number of pips to close the series of orders. That is, the series is closed when the profit reaches TakeProfit points.
You should not set the value too high, as the goal of the Expert Advisor, first of all, is to bring the series into profit as soon as possible and start a new one. A distant profit can delay the exit from a drawdown for a long time (from several days to many months).
Drop - automatic closing of positions on sharp jumps of quotations. The CCI indicator is used for analysis on a 15-minute chart, with a calculation period of 55 bars. To disable this function it is enough to set the value too high, for example, 10 000.
There are doubts about where to use this function. Ideally, this function should save from sharp news spikes, preventing even greater losses. But, in any case, it is better not to trade this strategy at all during the period of important news releases.
RsiMinimum - value of the lower boundary of the RSI (Relative Strength Index) indicator. The parameter is used to determine the oversold zone when opening a sell position.
RsiMaximum - value of the upper boundary of the RSI indicator. This value determines the overbought level and is used when opening a buy position.
MagicNumber - unique number of a trading Expert Advisor. It is needed to distinguish orders opened by one Expert Advisor from another.
A unique number should be set for each instance of the Expert Advisor working on the same account.
MaxTrades - maximum number of simultaneously opened orders.
Obviously, the lot cannot grow indefinitely (assuming a finite deposit), so here you should specify the maximum size of the order series according to the size of your initial capital.
UseEquityStop - inclusion of a stop loss on equity.
TotalEquityRisk - when the specified percentage of equity drawdown is reached, all positions will be automatically closed.
UseTrailingStop - inclusion trailing stop for all orders. By default, the value is equal to 10 points and is hard-coded in the code.
UseTimeOut - includes position closing by time. That is, regardless of the financial result, all positions are closed if they are in the market for more than a specified period of time.
MaxTradeOpenHours - time in hours after which all positions are closed.
Testing the Expert Advisor on history
For the first test of the Ilan 1.6 Dynamic Expert Advisor, we will proceed according to the traditional scheme - without loss limiters. So, we disable the Drop parameter, UseEquityStop and UseTimeOut. Everything else is left by default. The initial lot is 0.1, the initial deposit is 1 000 000 dollars.
Based on the test results from the beginning of 2015 through April 2016, we had a 100,000 net loss and a maximum drawdown of $140,000. Almost all of the loss came from just one series of 10 trades. At the same time, the most profitable series brought us only $1,630 in profit for five consecutive open orders.
But, it is not for nothing that the authors tried to introduce so many ways to limit losses? Therefore, for the next text of Ilan 1.6 Dynamic we return all the parameters disabled in the previous test - timeout by time, stop-loss by equity and loss limitation by CCI. At least, compared to the previous test, we would like to see risk reduction.
Based on the test results for the same time period, the maximum drawdown was increased to 244,000 and the net profit was reduced to -225,000 dollars. But, predictably, the maximum loss generated from a single series was almost halved from -120,000 to -68,000. Unfortunately, this had little effect on the riskiness of the trade. Due to the changed conditions, the number of trades in this test is twice as high as in the previous test, i.e. the risk per trade remained approximately at the same level. The difference is that you will lose your deposit not at once, but gradually.
This test clearly demonstrates the result of using the same strategy over the same period of history.
Conclusions
As a rule, advisors of this type are equipped with a set of optimized set fileswhich allow them to pass the first stage of selection - tests on history. The second feature is 100% profitability of transactions. This is achieved by precisely measured risks and periodic draining of the deposit.
If you are lucky and the trading conditions are right, you can make quite a substantial amount of money with this strategy. Similarly, you have a chance to win the lottery, casino or find a lost bill.
As a rule, the most successful Ilanovators are founders PAMM accounts. In their case, the risks are minimized, because by trading not on their own funds, they significantly reduce the risk of loss for themselves.
But you can also successfully use this strategy on your own, for example, to disperse a bonus account.
В долгосрочном периоде стратегия работать не будет, даже если периодически пытаться выводить прибыль (судя по тестам, ограничение убытков приводит к еще худшим результатам). Если верить статистике, желающих «сыграть на все» находится достаточно много, и здесь вины стратегии нет. Главное – правильно подойти к задаче, и тогда вы, возможно, останетесь в выигрыше.
Apparently the lan 1.6 Dynamic definitely falls under the category that everything is ingeniously simple.
It's like betting on the same color all the time in a casino and doubling your bet in case of failure. The problem is that the wrong color in practice falls 10 times in a row very often, and once a day, if the roulette spins every 10 minutes, may fall 20 times in a row the wrong color.
Why use this Expert Advisor if trading with it leads to deposit drain?
As the description itself says, it doesn't always lead to a plum. It will happen for sure, but if you approach the issue wisely, you can squeeze something out of it. For example, you can successfully catch a wave at numerous contests or guess the trend and swing your deposit.
In general, there are opportunities to make profits with martingales, but you have to know how to do it.