Discussing the article: "Build Self Optimizing Expert Advisors in MQL5 (Part 2): USDJPY Scalping Strategy"

MetaQuotes 2024.12.17 12:30

Check out the new article: Build Self Optimizing Expert Advisors in MQL5 (Part 2): USDJPY Scalping Strategy.

Join us today as we challenge ourselves to build a trading strategy around the USDJPY pair. We will trade candlestick patterns that are formed on the daily time frame because they potentially have more strength behind them. Our initial strategy was profitable, which encouraged us to continue refining the strategy and adding extra layers of safety, to protect the capital gained.

In our last discussion on building Self Optimizing Expert Advisors in MQL5, we built a linear regression model to create entry and exit signals for our trading application, a link to the previous article can be found, here. In retrospect, we may not need all the moving parts available in a machine learning model. Rather, we can observe machine learning models as an example of how to solve real-world problems using dynamic rules. We can then use the same simple principles of thought and logic to potentially guide our trading applications to higher levels of profitability without necessarily creating a behemoth code base to maintain.

For our discussion today, we aim to trade the USDJPY pair profitably on the Daily Time-frame. Our trading strategy will be based on candle stick patterns. In particular, we will be trading reversal patterns created by engulfing candles. Our rules for a bullish engulfing candle will be satisfied if our Open price is lower than the previous Day Close and the Close price is greater than the previous day Open. An example is depicted in Fig 1 below. These candle stick patterns are believed to show that a certain price level was rejected with considerable strength.