Trading system "for two orders"
Hello, dear readers. In this issue we will look at trading strategyThe system does not use any indicators to obtain signals for opening trades. This system does not use indicators to receive signals to open trades, i.e. the trading system under study is based on price alone.
Rules of the trading system
If we meet a specified number of consecutive bullish candlesticks on the chart, we open two candlesticks on the market shopping. For both orders set StopLoss based on the volatility of the last 20 bars multiplied by a certain coefficient. For the first trade we set TakeProfitFor the second one we use only Trailing Stop on the price channel. The deal is opened with a fixed percentage of the deposit (see Fig. 1).
Fig. 1. Example of a pattern to buy.
For sales it's vice versa: if we observe a given number of downward pointing candles - we open two sales - with a fixed TakeProfit and only with Trailing Stops on the lower boundary of the price channel (see Fig. 2).
Fig. 2. Example of a pattern to sell.
Testing of the trading advisor
Trading Advisor is written, so we can start testing. We will conduct research on several currency pairs, Four-hour timeframe (H4), the risk for each transaction is set at 0.5% of the account balance. The test period - about three years, the starting balance of $1000.
Let's consider the results of testing the system on EURUSD (see Fig. 3).
Fig. 3. Testing the Expert Advisor on the EURUSD currency pair.
Drawdown during the test was approximately 61%, while the result was that the EA did not manage to earn anything, even on the contrary, the loss was ~$50. With such results, of course, it is impossible to work, so let's continue the study. The next test will be conducted on GBPUSD (see Fig. 4).
Fig. 4. Testing the Expert Advisor on the currency pair GBPUSD.
This experience is no better than the previous one, if not worse. During testing the loss was $663.05, while the average profitable trade was 1.5 times more than the average unprofitable one. But even this has not saved the account, which has gone into deep deficit. Let's carry out a test on the AUDUSD pair (see Figure 5).
Fig. 5. Testing the Expert Advisor on the AUDUSD currency pair.
The test is largely similar to the previous one. The result was also a loss of about 50% from the initial balance, plus the strategy was, but not for long. Therefore the Aussie is also removed from the shields.
Last let's consider two more currency pairs USDJPY (see Fig. 6) and USDCAD (see Fig. 7). There is the last hope for them, although judging by the results above, there is very little faith in a good balance chart.
Fig. 6. Testing of the Expert Advisor on the currency pair USDJPY.
Fig. 7. Testing of the Expert Advisor on the USDCAD currency pair.
As we can see, even with these tools we did not get quite the result we would have liked. We have not found anything similar to stable operation in testing the Expert Advisor by the author's rules, so let us try to refer to advisor optimization.
Optimizing the trading expert
The smallest loss was obtained on the EURUSD pair, let's perform a small optimization of some parameters of the Expert Advisor on this pair. Optimization was done on timeframe H4. It was found that in the Expert Advisor it is necessary to use risk/profit ratio in the amount of 2:1, it will be set. Also we have chosen the optimal percentage of the deposit to trade - 0.8%. As a result of these changes, the Expert Advisor has achieved the following result:
Fig. 8. Testing a trading Expert Advisor with optimized parameters.
Over a period of about three years, the advisor was able to earn about 540% with a maximum drawdown of about 58%. Despite high volatility accounts, the average profitable trade is twice the average unprofitable trade, and the maximum profitable trade is three times the maximum unprofitable trade. Most likely, such volatility is primarily due to the average continuous loss, the value of which is 4.
Conclusion
The system is suitable for trading, perhaps additional filters should be used for position opening signals to reduce drawdowns and smooth the balance curve. Trading pairs should be selected trending, e.g. EURUSD.
The stats of the studies proposed in the article | Trading advisor and indicators