(I know I’m about to ask a bit of an off-topic question, but being my first post, I can’t do it in a separate thread)
I’m extremely new to Forex and I’m trying to get my feet wet with EAs since I don’t think I’d be able to do analogue backtesting.
Please, tell me why this strategy is gonna fail:
I’ve mashed together an EA, backtested it some and will test it on demo this week. I used a simple 2MA crossover and found five pairs where it was profitable over the last 18 months. I’m then using another EA to close all trades when they have collective profit of 50 pips. I’m hoping that this will ensure more trades being made and fewer being stopped out. The pairs are a little overlapping but not too much, so that I’ll hopefully minimize several of them going against me at the same time.
The details:
I’m extremely new to Forex and I’m trying to get my feet wet with EAs since I don’t think I’d be able to do analogue backtesting.
Please, tell me why this strategy is gonna fail:
I’ve mashed together an EA, backtested it some and will test it on demo this week. I used a simple 2MA crossover and found five pairs where it was profitable over the last 18 months. I’m then using another EA to close all trades when they have collective profit of 50 pips. I’m hoping that this will ensure more trades being made and fewer being stopped out. The pairs are a little overlapping but not too much, so that I’ll hopefully minimize several of them going against me at the same time.
The details:
- The pairs are AUDCHF, AUDUSD, EURCHF, EURUSD, NZDJPY. I deliberately didn’t test GBP, because wrapping my head around Brexit is beyond me.
- All the charts are 30m charts. I’m not sure that’s smart, but the EA I tested didn’t have an option to optimize more charts, so there. I’m assuming the timeframes should impact on the size of my SL and TPs?
- The 2MA are around 5-10 to 20-40, depending on the optimization. I’m not sure it’s important to have the same MAs for all the charts?
- All of the SL and TP are around 30 pips SL and 30-40 TP. My closing EA is set at 50 pips (is this what you would call a “hedge” EA?). I wasn't able to test all of them together in MT4, so I've got very little idea how this will work in forward testing.
Am I missing something really obvious with this setup? I’m aware that I’m not “cutting my losses and letting my wins roll”, but I’m not quite sure how this is easily done in an EA.
Is it easier to test this in MT5? I'm using MT4, since that's what fitted the EA, but it might be better to use MT5.
On an overall note I think I’m mentally better suited for shorter time-frames, since I think I’d like the option of closing my trades before going to sleep
I hope this is not too off-topic and I hope none of this is easily googled