I’ve been developing an EA for this strategy for several months. The main reason was to back test this great strategy and possibly to trade it. To date I’m having amazing results and I want to share my findings like Edward did.
First I have to say that currently this EA is like a wild horse that needs to be domesticated, it has a lot of potential, gives huge profits but also gives scary losses. The good thing is that on the long term, profits prevail. May be together we can improve it.
For example, back testing with Alpari UK data starting January 2008 with a 10K account (10K = 10.000 USD), risking to loss 2% of the account on every trade, the EA managed to turn those 10K into 87K by the end of December 2008.
What happened on 2009? It started with 87K and ended with 199K.
What about 2010? It continued with 199K and ended with 330K.
Form 10K to 330K in three years, risking only 2% on every trade? That is nice and sounds like real life.
On the other hand if you set the parameters to risk 5% on every trade, the profits go ballistic. It goes form 10K to 27 Million USD in three years!!! That is crazy and I don’t think that would be permitted on a real account, because when the EA is configured with 5% risk, it ends trading really huge lots and I think no Broker is going to permit that.
Any way, that is configurable and we can set a maximum lot size to avoid problems with the Broker if we ever go live with this EA.
The EA is based on the original rules but I have tweaked the rules in some aspects to improve the EA performance. In the near future I will comment about the changes to the rules.
In the mean while, you will find the EA source code along with my last tests on the following link:
http://sites.google.com/site/fxpassion/eas/trend-lines-breakout-systemPlease feel free to download and test.
Happy trading.
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Haydel