Saturday, August 29, 2009

Support Resistance EA V6_0

Update 12/1/2010: this forward test now replaced with an MT5 Virtual Order Manager equivalent coexisting with the FrAMA Cross EA. See statement here and live screenshot here. All links below are still valid.

This EA is my most successful to date, although I still wouldn't call it a really good EA.  Its strategy is the age-old concept that price will sometimes bounce off significant support and resistance points.  When I was designing it, I had an idea that I could scalp small profits off the reversals, but instead stumbled on a large takeprofit of 360 points.  The result is an EA for which the profitable trades figure is not much more than 30%.  The combination of 360 TP and 30% profitable makes it rather hard to trade, because it frequently gives back profits early in the trade.

It has pulled about 1500 pips off the market since July 2008 when I started trading it live.  Why not 2,194 pips, which is what the backtest now says it should have done?  Simply because I manually exited a lot of trades, which is an interesting example of trading psychology at work as a result of the difficulty in trading it.  Trading system purists could scoff at my weak-kneed approach, but remember that I was (and to a lesser extent, still am) not certain that it will be profitable in the long term.

I run it at the moment with no money management at a fixed 0.1 lot.  Here are three backtests from 1/1/2004 to 28/8/2009
  • Flat 0.1 lot  Quite encouraging - maximum drawdown is 832 pips
  • Money management with 2% x 80 pip risk - probably too agressive, but it's nice to dream.  A toned down money management at 1% looks a lot better
  • Martingale - just for fun.  Even though this never trades above 0.9 lot, I've never found an EA that I would be comfortable running live in martingale mode
Note that the open prices only model is valid for this EA because it uses shift = 1 on all entry signals, and has such a large takeprofit.

1 comment:

  1. Hi,

    I am unable to down load support-resistance-ea-v60

    Can you send by enmail. my email is