The Katana is an automated trading system designed for working on the currency pairs with high volatility, such as EURUSD, GBPUSD, USDJPY. This strategy is best suited for the EURUSD currency pair. The working timeframe is H1.
When a trade signal appears, the robot places BUYSTOP and SELLSTOP pending orders on the significant price levels. The market orders are maintained by trailing stop or force closed by breakeven in case the price deviates from the target in the positive area.
The trading system calculates the risk value per trade relative to the Stop Loss level and deposit size in accordance with the value specified in the Risk parameter.
Once the limit on maximum order volume (set by broker) is reached, the system starts increasing the number of trades and split the traded volume between them, while reinvesting the profit obtained during trading.
The trading system should be tested starting from 01.01.2008, when there had been a significant growth of volatility. By default, the EA was optimized for trading the EURUSD pair, optimization is required for other currency pairs. The quotes of the M1 and H1 timeframes are necessary for testing. The testing approximated to real trading should be performed on tick data with 99,9% modeling quality with the help of the Tickstory program.
The following is recommended for trading using this system:
- Before starting to work with the system, run tests with different values of the Risk parameter, in order to obtain an acceptable return and risk balance. It is best to consider the last 2-3 years. If you need help with obtaining the highest quality test of 99.9% for the selected period, you can request it from me via e-mail. The following values of risk per trade have been determined as suitable for use: 3 – low risk (for large deposits starting from $50000), 7 – medium risk ($3000-5000 deposit), 15 – high risk ($500 risk). It is possible to set the risk per trade to 20% for small amounts ($50 - $300), gradually decreasing it as the deposit grows. The examples of testing with different risk values are provided in the screenshots.
- It is advisable to withdraw 30 to 50% of the obtained profit at the peaks of profitability.
- Before you start trading, make sure that your broker has zero stop levels (can be checked in specification of a currency pair), it is also recommended to use account with minimum slippage and low spread (0.0-0.7 points) for trading. If you need any help in choosing the right broker, contact me via private messages.
The setting has the following adjustable parameters:
- TakeProfit - distance from the order price to Take Profit level in points
- StopLoss - distance from the order price to Stop Loss level in points
- Risk - risk per trade
- TrailingStop - enable trailing stop
- TrailingStopLavel - size of trailing stop in points
- ReverseClose - force close orders when the price deviates from the target in the positive area
- ReverseBars - the number of analyzed bars when the price deviates from the target in the positive area
- ReverseSignal - percentage of price deviation from the target (from 1 to 100%)
- CloseCoef - spread multiplier during the force closure in positive area
- Info - information on settings and the trading account (disable during testing)