EA SPARTA - ALGORITHM FOR POSITIONS MANAGEMENT

EA SPARTA - ALGORITHM FOR POSITIONS MANAGEMENT

9 January 2020, 12:42
Mikhail Sergeev
0
2 210

This material was created at the request of our betatesters, so that our systems do not seem to them and other users "Black box".


On the stock exchange, you can often hear that averaging, martingale, and other types of progressive money management do not work. The reality is that more than 90% of successful, highly profitable and long-standing signals use this method of money management. The situation is similar with top PAMM accounts.


Sparta is a fully automatic multi-currency expert Advisor that uses a unique method of managing positions "Decreasing waves". This method is designed specifically for working with stock charts and works perfectly in the Forex market. The essence of the method is that price waves can not always decrease and when the wave of increased size comes, we return all the losses from previous transactions. Detailed description of the method...




It is known that the patterns of price movement always change and price patterns that work for years stop working for no reason and instantly. This is what makes predicting the prices of financial instruments so difficult. However, there are rules that the price simply can not get around.


The main dogmas of the "Decreasing waves" model"

  1. Charts of exchange instruments reflect the real situation and can not be what they want. In other words, you can't draw any picture with a graph(no matter who is running it). 
  2. A series of successively decreasing waves cannot last indefinitely.
  3. The greater the number of successively decreasing waves in the series, the longer and longer the waves will be when this reduction stops.


    This information is enough to build a profitable and stable trading system. The EA Sparta starts searching for the entry point when two successively decreasing waves are formed.


     

    Entry into the position is carried out by turn-down stop orders. If the planned profit was not achieved(the current wave was not large enough), the opposite position is opened with the possibility of increasing the lot.



    There are two completely independent trading modules A and B in the expert Advisor. Module A starts a series of trading deals with BUYSTOPS. Module B with SELLSTOP orders. Since the modules can have different settings, this provides additional hedging. In the screenshot below, the parameters of modules A and B are similar, but not the same.




    The use of the most modern and, in our opinion, the best trading platform, MetaTrader5, made it possible to make the system multi-currency, with a full check in the strategy tester. Nevertheless, we considered it reasonable to limit ourselves to the main dollar pairs, as problems with slippage and spreads on cross rates can greatly worsen the result.


    2010-2020, Fix lot 0.01, Auto trade: EURUSD, GBPUSD, AUDUSD, NZDUSD, USDCHF, USDCAD, USDJPY

       



    It is worth noting that this type of system could be made completely break-even(subject to the availability of free funds). So that each closed series had a total plus profit. And the graph was linear and upward. In practice, this solution was less stable.

    For six months, our team conducted various experiments. We tried different settings and layouts. And checked the result on forward tests, other tools and all sorts of brokers. Polished break-even options led to a strong increase in drawdowns on new data. The best results were shown by the layout of 4 orders where the parameters of 4 orders are a constant. This option gives a much smaller profit during the optimization period, but it copes better with new data.


    2019, lot = 0.05, Auto trade: EURUSD, GBPUSD, AUDUSD, NZDUSD, USDCHF, USDCAD, USDJPY





    Testing on data that did not participate in the optimization is a good way to check how the system will behave in the future. Standard (5 years optimization and 1 year forward test) forward tests system passes with ease. Let's make a more serious check...


    To the left of the red line 6 years of new data, huge spreads-more than 100 points on some pairs, 7 currency pairs:




    Download free EA Sparta:  https://www.mql5.com/en/market/product/38375

    EA Sparta version without restrictions: https://www.mql5.com/en/market/product/38374


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