Perfecting Your Expert Advisors – Winning Trading Signals

In this article I will teach you how to perfect your Expert Advisor (forex robot), by enhancing the quality of your signals and entries.

Entries are undoubtedly the most important aspect of any Expert Advisor. A matter of a few pips can be the difference between losing or winning. I will now describe the popular ways of increasing the probability of entries, and their advantages and disadvantages.

Confirming with Many Indicators

While the idea of cross-confirming with many indicators seems attractive to novices in the field of Expert Advisors programming, it usually leads to a flawed system which rarely works. The reason behind it, is the following: The more indicators you add, the less trades you are going to have, therefore, you can’t really estimate the profitability of your system. Furthermore, the use of many indicators often encourages beginners to over-optimization of their robot, which is the ultimate kiss of death to any EA.

Using a Long-Term Moving Average

This technique is also a popular one, used to filter trades. The user adds a long term Moving Average (usually of 100-200 periods) and requires all trades to be in the direction of that MA. Unfortunately, as profitable as this technique sounds, confirming your trades with an 200-MA often disables the systems edge, by removing any chance of catching market bottoms and tops – where the big trends lay. The EA could only catch small trends, which are often corrections rather than actual trends. Using this technique can…

Source by Michael Wells

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