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