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A good EA for auto trade needs to have:
(1) Entry Module: this purely bases on price. The output is price to enter the market, SL level, TP level. SL and TP levels should be modified (updated) when time and price change.
These lead to the following sub-modules:
(1.1) signal (when to open a market order);
(1.2) SL_level;
(1.3) TP_level.
To increase the hit rate, there are 2 approaches:
(1) Use larger TF, daily chart is a good one. With this, the small moves of the price will not affect much to the equity. There are only a few trades per month.
(2) When use smaller TFs (like 1H or lower), the target point-gains for each trade are smaller, there are many more trades (per week).These lead to small move of the market can affect more to the equity. Price movement at this smaller TFs are much more complicated. It is helpful to reduce the variables that affect the market movement, for example: Trade on certain session, on certain days,... so there needs to be a module that only allow trades to open at certain timing. This leads to a the need to have a module named:
(1.4) TradeTime
For now let focus on approach (1) (daily chart).
A signal should not just based on the value of an indicator which is calculated from historical price like RSI>80 or price is above BB200 line,... Using RSI>80 only is has too low hit rate. Instead, it is necessary to evaluate past RSI values. OR, using multiple RSI. Currently "RSI_Multi" indicator is for this.
(2) Lot size Module
(1) Entry Module: this purely bases on price. The output is price to enter the market, SL level, TP level. SL and TP levels should be modified (updated) when time and price change.
These lead to the following sub-modules:
(1.1) signal (when to open a market order);
(1.2) SL_level;
(1.3) TP_level.
To increase the hit rate, there are 2 approaches:
(1) Use larger TF, daily chart is a good one. With this, the small moves of the price will not affect much to the equity. There are only a few trades per month.
(2) When use smaller TFs (like 1H or lower), the target point-gains for each trade are smaller, there are many more trades (per week).These lead to small move of the market can affect more to the equity. Price movement at this smaller TFs are much more complicated. It is helpful to reduce the variables that affect the market movement, for example: Trade on certain session, on certain days,... so there needs to be a module that only allow trades to open at certain timing. This leads to a the need to have a module named:
(1.4) TradeTime
For now let focus on approach (1) (daily chart).
A signal should not just based on the value of an indicator which is calculated from historical price like RSI>80 or price is above BB200 line,... Using RSI>80 only is has too low hit rate. Instead, it is necessary to evaluate past RSI values. OR, using multiple RSI. Currently "RSI_Multi" indicator is for this.
(2) Lot size Module
Last edited by Admin on Tue Jun 27, 2023 11:09 pm; edited 1 time in total
