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Dominant Strategy

The Dominant Strategy Expert Advisor is the winner of the Automated Trading Championship 2012. It trades following a trend strategy based on the proprietary cluster indicator 'Сomplex Indicator'. It trades one of the currency pairs of the cluster.

The Expert Advisor works on all timeframes without losing its profitability. Select a timeframe at your discretion. The trading robot is highly reliable, as it has been developed considering trading on a real account. It includes error handling functions. Stop loss is included in external parameters. It is optimizable.

The trading strategy is based on creation and use of a currency cluster consisting of the following pairs: "EURUSD", "GBPUSD", “EURGBP", "EURJPY", "USDJPY", "GBPJPY".

Franc was removed from the cluster currency since it was tied to the euro during the championship.

For each currency pair that is a member of the cluster, a unique curve-sine 0 normalized wave is created for its open price, close price, high and low, using two moving averages and weight of this currency pair in the cluster.

As a result, an indicator draws a curve-wave of all currencies from the cluster. If its zero is crossed upwards, a Buy signal is generated; if it's crossed downwards - a Sell signal. The EA uses this principle to enter the market. Only one position can be open in the market at the same time. This is a reverse system, ie an entry signal is an exit from the previous position. The EA uses single market orders to enter the market.

For the championship, I used a distant TP and did not use stop to maximize potential profit. It can be used for working on a real account after optimizing it in backtests.

The timeframe can also be optimized, but I optimized the EA parameters on a preset timeframe. Then I changed the timeframe and re-optimized.

EA Parameters

  • StartLot — the initial lot size;
  • MaxLots — the maximum lot size;
  • SizeOfDepo — the deposit size for the initial lot calculation;
  • TP — Take Profit value in points;
  • SL — Stop Loss value in points;
  • MA_Slow — slow MA period;
  • ENUM_TIMEFRAMES MA_Slow_TF — timeframe for the slow MA calculation;
  • MA_Fast — fast MA period;
  • ENUM_TIMEFRAMES MA_Fast_TF — timeframe for the fast MA calculation;
  • kUSD — kUSD coefficient in the currency cluster;
  • kGBP — kGBP coefficient in the currency cluster;
  • kJPY — kJPY coefficient in the currency cluster;
  • kEUR — kEUR coefficient in the currency cluster.

Money Management System

The trading volume depends on results of previous trades. To trade a fixed lot, set its value in MaxLots, and specify 0 for StartLot. The recommended initial deposit value is 10000 USD. It can be changed as a result of parameters optimization.

The championship duration is 3 months. (25% of the optimization period), the EA was optimized on a 2-year history period to have 25% of forward testing.

During the championship, the Expert Advisor based on my proprietary ides proved to be able to profit on GBPJPY. During backtests on the same time interval with the same external settings, the EA also was profitable on EURUSD.

The differences between the testing results and championship performance are connected with the peculiarities of the strategy tester.

See the screenshots for the values of external parameters for a single test run, optimization, and EA testing during the Championship. The last two screenshots feature the compliance of trade directions before the end of the Championship.

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