Cowabunga EA - System Settings and Analysis

Here are the 2nd Test Settings for the CowabungaEA.

The EA is being developed from the forum version(s), other information and custom indicators, as well as, testing settings from the trade machine version.

If you are new to my posts and to what I’m trying to achieve with the Cowabunga EA’s open development please first view my post “Cowabunga EA addons” in the Expert Advisors and Automated Trading thread.

[B][U]Analysis of the Mechanical (Manual) Cowabunga System Trades[/U][/B].

With the second test we will try to establish a simple method for making the EA continuously profitable. Readers of my few posts and other forum posts will know that the Cowabunga manual system is quite profitable, but most attempts to maintain this within an EA have not been successful.

Thanks to Pip Surfer’s blog posts including his trading histories we have hopefully established some realistic and more sensible settings for MinTP, MinStop and MaxStop.

Here are some interesting stats that Pip Surfer himself might not be fully aware of :slight_smile: As of 01/21/2010

Total Profitable Trades: 302 (+11096 pips) Avg. TP: 36.74 pips

Total Loosing Trades: 194 (-5204 pips) Avg. SL: -26.82 pips

So folks that’s a total of +5892 pips since Jan. 2007 (i.e. the system works!)

Using these statistics we have chosen the following new settings to try and make the currently available Cowabunga EA perform as close to the manual system as possible.

[B]MinTP 20[/B] (10 default) - Pip Surfer’s avg. TP is almost 40pips ! However, it’s unrealistic to use this as the MinTP of course. The value MinTP 20 may [B]not[/B] be optimal. However, it’s much better to take the MinTP at 196 total trades above 20 pips than it is to take 283 total trades at above 10 pips! i.e.

196 x 20 pips = +3920 pips
283 x 10 pips = +2830 pips

Take Profit is still reachable, but below the avg. threshold and this should maintain a much more reasonable profit to risk ratio. N.B Only 15 manual trades were below the 10 pips TP which is of course negligible overall and also not allowed with some brokers.

[B]MinStop[/B] 15 (15 default) - This is probably stlll a reasonable value to test.

[B]MaxStop[/B] 30 (50 default) - Pip Surfer’s manual trades have an avg. loss of around -30 pips. Again, this should be a much more acceptable loss to risk ratio. Only 69 out of 194 loosing and ‘stopped out’ trades are more than -30 pips. If this 35%+ of the more than -30 pip loosing trades can be ‘capped’ at this level without affecting the swing high/low then this will greatly increase the EA’s total profit in pips.

[B]TPMustBeGreaterOrEqualToStop[/B] false (default false) - This was previously set to true to test a wider spread (50 / 50 ratio in the 1st test), where some lots and initial trades are to close to the 00 or 50 levels (as per Pip Surfer’s recommendations and within the EA settings of course). The relatively large stop loss and therefore TP was both beneficial and problematic here! Given the above statistics it’s much easier to understand where the big high/low - profit/loss swings stem from.

This 2nd test will be much closer to PipSurfer’s recommendations and trading times and will hopefully more closely ‘mirror’ his future trades and profits. We will be adding the ‘AvoidNews’ features in this 2nd test from Pip Surfer’s postings.

We expect to see less overall profitable trades than Pip Surfer. However, these will hopefully be offset with our stop losses. N.B. this maybe close to the optimal performance for the EA, before the implementation of it’s new features and settings with the Neural Network additions. Valid entry points also need much more work, because their is no ‘automatic’ exit once a trade has begun to swing in the opposite direction. These are ‘human’ factors which are difficult to determine. This will be the main focus of a Neural Network style addition to the EA.

[B][U]CowabungaEA 2nd Test Settings for GBP/USD only[/U][/B].

[B]StartTimeGMT[/B] 08:00 (default 04:00)

[B]EndTimeGMT[/B] 22:00 (default 20:00)

[B]AutoCloseOrdersAtEndTimeGMT[/B] true (default true)

[B]LotSize[/B] 0.1 (default) 0.01 for mini-account

[B]MagicNumber[/B] (user defined)

[B]MinTP[/B] 20 (10 default)

[B]MinStop[/B] 15 (15 default)

[B]MaxStop[/B] 30 (50 default)

[B]TradeIfStopIsGreaterThanMaxStop[/B] true (default true)

[B]TPMustBeGreaterOrEqualToStop[/B] false (default false)

[B]EMA4HrFastPeriod[/B] 5 (default)

[B]EMA4HrSlowPeriod[/B] 10 (default)

[B]EMA15MFastPeriod[/B] 5 (default)

[B]EMA15MSlowPeriod[/B] 10 (default)

Edit: Live MT4stats are no longer available.

N.B. A test for GBP/JPY will also follow. However, the ‘optimal’ setting will be somewhat different. Moreover, we think that the GBP/JPY could be potentially more profitable using the Cowabunga EA than it might be with the GBP/USD !

Active Currency Pairs - Avg. Pip Range

London Session (3am to 12pm ET) 8am to 5pm GMT (8 hrs)

  • GBP/JPY - average range 140 pips
  • GBP/USD - average range 110 pips

New York Session (9am to 5pm ET) 2pm to 10pm GMT (9 hrs)

  • GBP/JPY - average range 120 pips
  • GBP/USD - average range 90 pips

Tokyo Session (7pm to 4am ET) 12am to 9am (9 hrs) crossover - depends on BST etc.

  • GBP/JPY - average range 110 pips / 4.5 (approx)
  • GBP/USD - average range 60 pips / 4.5 (approx)

Here’s to avg. pip ranges and volatility :cool:

Happy Trading and GL !

Thanks.

XeroFX.

Important ‘AvoidNews’ Notice.

The Cowabunga EA is ‘hard coded’ to GMT BST. Usually a broker will retain it’s time setting during British Winter Time.

I’m located in the UK and during British Winter Time my Alpari-UK Broker time is 8:00 when the actual GMT time is 7:00 !

We are trying to trade from London open to NY close, so our actual EA times are;

[B]StartTimeGMT[/B] 09:00 (default 04:00)

[B]EndTimeGMT[/B] 23:00 (default 20:00)

This of course also effects the ‘AvoidNews’ time settings within the EA.

For Example todays news event: “Tue 1/26 9:30 GBP Gross Domestic Product -3% -5.1%” actual EA time is 10:30. i.e.

[B]AvoidNewsStart1[/B] 10:00

[B]AvoidNewsEnd1[/B] 10:30

However, the actual times will not alter during GMT BST. Users and brokers in EST zones are not affected, but always check your broker / EA times ! :eek:

Our 1st automated trade closed at 8:44 +20 pips from a 7:01 signal. :slight_smile: :rolleyes:

cowabungatest2.mt4stats. com

Thanks.

XeroFX.

Tuesday 01/26/2010

Cowabunga EA +20 pips – Pip Surfer +17 – (due to our slightly earlier start)

Wednesday 01/27/2010

Cowabunga EA -30 pips – Pip Surfer -34 – (due to our fixed max stop)

There was an opportunity to take a +10 pip profit on the Wednesday trade, for any Manual trader monitoring the EA’s activity, as there was a fairly obvious swing in the other direction.

Remember: The above settings for the EA will [I][B]never[/B][/I] be able to compete with Pip Surfers occasional big +50 +100 pip profits.

However, it should be able to maintain a good profit to risk ratio as the EA will [B][I]never[/I][/B] take Pip Surfers occasional big -50 -100 pip losses.

That’s why we chose to set the Max Stop and Min TP at Pip Surfer’s ‘Historical Trading Averages’ !

At least the EA is performing close to Pip Surfer trading activities at the moment. This is very promising for our future Neural Net development of the EA :slight_smile:

However, we expect to be ‘out piped’ by Pip Surfer’s trading very soon ! :wink:

Cowabunga Dudes !

Happy Trading and Good Luck.

XeroFX.

there is an EA to the cowabunga?

is this THE cowabunga system we’re talking about here??

Is the EA available for download or still undergoing testing?

where can we download it? thanks for sharing…

First, thank you very much for your generous work and sharing.

With an ever changing daily range, conditions, etc How do you expect fixed Max SL to work on the long run ? What about when the range expand or shrinks ?? shouldnt the MAx reflect the changing force of price movement ?

How will a 30 pip SL will work when range jumps to 200 pips for a few weeks, or goes down to 100 pips for a few ?

It would be great to know how this EA can take that change into account.

Looking forward to seing your progress with this ea !

I cant wait for this. It will be a big bang!! Please update us on more news. Thanks, ! family!!

Hi,
I have only recently come across this system and have a suggestion to throw out there. This sort of throws a lot of the stuff you’ve said out the window but I think it is worth some consideration.

Firstly I think that using the most recent swing high/low as a stop is a good idea but the distance can be reduced by using the 5EMA shifted by 5 horizontally. You will see that there is a ‘high’ point on this MA for the 5 periods ahead of the present period. This could be used as stop loss (plus an extra 5 pips so it has to cross right through the line to activate the stop). For exit, I feel using the 5EMA shifted by 3 as a trailing stop (plus 5 again) would be a good exit strategy. It allows you catch a good amount of the trend and does not limit you to certain targets.

This is the way I plan to use the system manually. I think the entry signals are very good. I think this is a good way to cut losses quicker and catch more of the movements when it goes your way.

After openly demonstrating the issues with the current CowabungaEA’s over the excellent Manual system in our unsuccessful tests, I thought it was time for an update.

Much work has been done and many improvements have been made. I am actively back testing and privately forward testing the EA.

I will share part of my previous post from the original thread to help others in the mean time.

"Sorry I cannot post the new EA, add-on or any ‘testing’ version at the moment. It’s not finished and is still being tested. However, the free Cowabunga EA’s are available elsewhere on the internet. The Custom Indicators can be found on this forum.

You can find a version for yourself. ‘Cowabunga Trade Machine’ - Google is your friend. :slight_smile:

The new ‘add-on’ will automate the ‘AvoidNews’ function for this EA and other functions to try and make the EA consistently profitable. None of the EA will actually be altered !

However, a new EA will also be built with open source code to return Pip Surfer’s Cowabunga EA System to this community. :cool:

From our test results you should realize that none of the currently available EA’s are consistently profitable and you are more likely to have loosing trades with any ‘default’ settings.

My best advice is that you should first learn to trade the Cowabunga Mechanical System from this forum (which is profitable) and then use the EA to assist you in your trading activities. Paying particular attention that the entry / exit points are valid. Also, remember to try and exit trades in profit if their is an obvious Swing in the other direction and your TP is missed.

Try to make good usage of the EA by first setting MT4’s auto alert facilities for trades and then monitoring the automated trading yourself. Perhaps try trading the manual system on one set of charts together with the EA on another set of charts to make a comparison. :slight_smile:

Always learn and understand the system you are trading with. Especially if it is an EA !

XeroFX."

hi XeroFX,

I just wanted to say thank you for your posts, great stuff.
I’m very curious to hear how stuff is working out with the EA at the moment,

Regards.

Hi XeroFX,

I have been using this EA on a demo account for few days and thought it would do better with some minor adjustments.

My suggestion is to make the EA exit the trade when EMA 15min crosses in the reverse direction or RSI crosses the 50 level in the reverse direction. This way the chance of getting closed out with a smaller TP as opposed to a potentially longer ride, would be minimized. IMHO this exit strategy would also limit the losses.

Only problem is I’m not familiar with MQL coding, besides this EA does not allow to be modified or edited since the file is in EX4 extension.

If you have any other Cowabunga EA that includes a dynamic exit strategy rather than a fixed TP and SL, please let me know.

Regards

Is this EA out yet?

It doesn’t seem to be but I would love to test it once it is out.

In addition, I would be willing to throw a few dollars to the person whom sets it up. Note: I would have to be profitable with live trades from this EA before I sent some support dollars.

Thanks