For the beginner traders, the EA Studio is a professional trading software for algorithmic trading. There is a generator that we use to create EAs and many analytic tools.
No need to program anything. So I have the generator in front of me here, and I will run it very quickly to get some strategies.
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And periods M15, as strategy properties, I have the range between 10 and pips for the Stop Loss and the Take Profit. Entry lot, a minimum of 0. And as generator settings, I will leave it just to 3 minutes and I will not use the common Acceptance criteria. So I will not filter the strategies in any way. For seconds hundreds of strategies are calculated. But these strategies that I just generated, they are not filtered. I just wanted to demonstrate the difference when we have one strategy and when we have many strategies.
If I click on refresh, the new strategies will show. You can see there are these vast drawdowns or stagnation periods in the strategy. S tagnation period is when in the balance chart, the profit reaches to one point and then for a long time, it does not make a better profit. You can see in the picture below that there are many stagnation periods in the Balance chart.
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You can see that this strategy has some drawdowns, going down for quite a long time, not making a new profit. The balance chart says a lot about the strategy. Let me go to the collection one more time, and I will choose some other strategies.
What we have in EA Studio is a portfolio of trading strategies. Let's discuss the steps to build a forex trading model. Building a trading model requires identifying suitable opportunities, which in turn involves choosing any defined strategies, or conceptualizing new ones as variants of standard ones. For e. Forex trading specific strategies require a careful selection of the following:. Post trade strategy and tradable security identification, the next step for building a forex trading model is to introduce forex strategy specific parameters which may include:.
Portfolio Forex Trading
This step primarily concentrates upon incorporating the following basic features into the trading model, with varying values to find the best fit:. One may start with a few assumptions, and fine-tune those as more iterative tests are conducted to find the best profitable fit. Any trading model which is developed by an individual reflects the characteristics, thought process, temperament and experience of the trader who builds it.
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Often constrained by knowledge or even personal challenges of ego or blind belief in self developed models, important aspects are occasionally overlooked by the traders. It hence becomes important to test the model on historical data, to identify the errors and avoid such losses in real world trading.
Backtesting also allows required customization within the set objectives profit targets, stop-losses, etc.
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Developing a trading model requires patient analysis, which includes numerous iterations by repetitive changes to mathematical parameters, as well as variations in underlying theoretical concepts. Today, it's trendy to attempt to automate everything. But remember: "The program is as efficient as the underlying concepts and the practical implementation built in it. Computers can be used to search for patterns in historical data which can form the basis of developing new models.
Back testing can also be aided by computer programs being run against historical data. One can either use the available applications on trial or purchase basis, or build new ones on their own for their requirements based on their familiarity with computer programming. Be sure to use the computer programs with a full understanding and applicability to your own selected strategies, to avoid any pitfalls later with real money trading.
One major advantage of using trading models is that it takes away the emotional attachments and mental roadblocks while trading, which are known to be the major reasons for trade failures and losses. A pragmatic approach, with continuous monitoring and improvements can help profitable opportunities through trading models.
Technical Analysis Basic Education. Diversification does not ensure against loss. There is no guarantee that these investment strategies will work under all market conditions and each investor should evaluate their ability to invest for a long-term especially during periods of downturn in the market. This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.
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