I am trying to code a breakout strategy, but on the backtests, it comes out unprofitable. are there any profitable EAs out there, without curve fitting? It seems really hard to convert a manual trading strategy to an automated system. On visual testing my EA enters breakouts too late, and oftentimes it enters at the end of a trend/beginning of reversal. any tips on programming/converting manual trading strategies to automated systems is greatly appreciated.
Hi 1mathboy1,
I am sure they do, the one I wrote is working fine for me. And thatâs the thing it has to fit you. You have to make the journey,
It is just not possible to get a EA and be successful it has to fit your beliefs about the market or you wonât be able to trade it.
But there are a number of things to consider. First if your trading idea is no good, then no, it wonât be profitable. I suggest you first code an indicator with entry arrows so you can see visually if your method is working as you think it should.
Then get the book âExpert Advisor Programmingâ by Andrew Young from Amazon about ÂŁ25.00 comes with all the code you need to build your own EAâs using the entry algorithm from your indicator. See book for examples.
Also remember breakout strategies are less than 50% successful so you will need tight stops and let your profits run. I also recommend some form of position sizing to increase your profits on winning trades, so check out books by Van Tharp, but not his latest.
It has taken me eight weeks to learn to code my own EAâs and I recommend it to anyone interested in automating their strategy. Get the book and download the code from the website.
Regards, Trader009.
Thanks for the insight! I will definitely check out those books. A few more questions-Do you use indicators, price action, or both? for me, indicators gave me a lot of false signals. adding candlesticks helped, but it was still unprofitable. Iâm going to learn more about price action (through the book, Naked Forex). Also, what returns per month/per year do you consider as satisfactory, for an EA (or manual trading)? Of course it is ridiculous to double your money every month, like a lot of scam EAs advertise, but doubling your money within a month is doable, occasionally.
Hi 1mathboy1
Thanks for your feedback. So many questions.
Ok, like most traders I have tried everything, paid for systems, been to seminars and read more than a hundred books on both trading and the phycology of trading, because as trading coach Van Tharp sayâs in his books you donât trade the market, you trade your beliefs about the market.
Also I believe you have to make the journey, until you have been there, done it and seen it, then you canât appreciate how difficult it really is in todays markets and understand the issues.
I made many thousands buying and holding company shares over the years but trading is a lot different and a lot more difficult, as there are so many more variables involved when trading and the market has become a lot more volatile, mostly due I expect to automated trading systems.
I had never made constant profits as a trader, but always managed to keep my losses very small. I have been running a micro account for the last few years trying to find a trading system with consistent wins. However, one week I would be up big and then lose it all again over the next few weeks and from what I can gather most other traders are in the same boat, or rather sinking ship.
All the books I have read on trading phycology list all the things you need to do to become a successful trader and some of the first questions are, and I quote from Nial Fuller.
Do I have an effective trading strategy that I feel confident with? Do I know what I am looking for when I analyse the charts or am I just sort of âshooting in the darkâ?
I do have a trading strategy that Iâve mastered and feel confident with, but am I actually following it and waiting for the setups to appear? Or am I disregarding my strategy and sort of entering randomly because I want to be in the market all the time?
Do I honestly have a structured daily trading routine that I could easily explain to other people and sound like I am know what Iâm doing? Or would I just sound like a bumbling moron who is obviously gambling my money away?
What type of money am I trading with? Is it âscaredâ moneyâŚAKA money that I know I shouldnât be risking in the market but I am anyways?
What is my pre-determined dollar risk-per-trade threshold that I am emotionally OK with potentially losing? Do I even have one or am I just ratcheting up and down my dollar-per-trade risk as I see fit?
Am I constantly glued to my charts and obsessed with analysing the 5 minute and other low time frames charts?
So April 3rd I decided I would not trade again until I could say yes to all of the above.
I had always been able to write a little code and modify indicators to give me buy and sell arrows on the charts complete with audio alerts, but I had never been able to write a EA before or even tried.
So over the last nine weeks or so I have learnt to become proficient in putting together an EA that I could use to backtest all of the trading systems I was trying to use unsuccessfully and some others I fancied maybe using to get past question one and two.
Amazing as it may seem and of course I already knew the answer, none of the systems I was trying to trade were profitable in the long run and others I wanted to try in the future didnât work either.
The first thing I learnt was that the biggest problem in the market today is volatility if you want to trade the trend, then volatility will keep knocking you out of your trades. For me that means a system that allows for market volatility.
Trend trades are less than 50% profitable so you have to cut your losses short and let your profits run. For me that means no profit targets, as I want to maximise every trade.
The system has to have consistent positive results, proven by backtesting and be tradable visually with indicators so I could see what was happening to compare with my EA results.
However, I planned to trade using a EA as it would trade 24/5 and I would be out the loop with all my emotions. Also the performance would be more likely to match the backtesting if I took a back seat
The system had to have a high opportunity rate to trade i.e. what I mean is, it is no good having a system that gives you 250 pips every time you get a signal if you only get one signal a year. So I needed good number of pips on every trade with good number of opportunities to trade.
Money management and position sizing are often overlooked by traders, so these were important factors that had to be addressed. I only wanted to risk a fixed percentage of my account on every trade so needed an algorithm to check the account size first, then find the percentage value and divide by the pip risk to get the lot size.
I also wanted to be always in the market, as I like to trade both Long and Short.
My conclusions are after nine weeks that the only pair that performed well in many of my different EA tests was EURJPY followed by USDJPY as these two pairs seem to trend better than other pairs at the moment.
The best system results I got was when using the MT4 SuperTrend Line indicator by Robinson 2008. This was the only trading system where I could get positive results for all pairs to some degree dependant on parameters and timeframe. However, AUDUSD for example was truly awful.
I carried out extensive backtesting using a wide range of parameters on all currency pairs in all timeframes and found EURJPY to be best with a 17,000 gain on 233 trades using position sizing on only 2% of a 10,000 account both long and short trades, as SuperTrend is a stop and reverse system. The backtesting was carried out using the strategy tester in MetaTrader 4 using the bar Open only method as I only trade once per bar on the Open in the EA.
I am currently live testing the SuperTrend EA this week on a micro account with positive results so far.
Learning to program in MQL for MetaTrader 4 has been difficult, but rewarding and would not have been possible without others sharing their code freely on line and my buying the âExpert Advisor Programmingâ book by Andrew R Young.
This method of trading the markets is in line with my market beliefs and therefore allows me to trade with confidence.
Kind regards, Trader009.
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