My EA Gift to Traders

Todays Discussion:

News - News events have a significant impact on currency trading and Traders Gift EA offers a facility to avoid placing trades around news events because the markets can be very volatile and common indicator readings may have no impact around these events and therefore be of little use.

There are 3 news avoid times which optionally can be specified. Within the times specified, no trades will be placed even if another enabled strategy gives a signal.

The default Hour setting for the 3 optional news events is set to -1 and each event will be overlooked as long as this value is still set. Any other value for Hour between 0 and 23 will be respected as a news time to be avoided. The minutes can be nominated between 0 and 59 and will also be respected as long as the hour is not -1.

AvoidMinutesBeforeNews and AvoidMinutesAfterNews default to 0 but I would suggest at least a value of 30 for both to avoid significant impact.

Todays Discussion:

Pivots - This filter is a check against the previous days trading to see if price is close to the significant support and resistance points, S3, S2, S1, PP, R1, R2, R3 where S = Support, PP = Pivot Point and R= Resistance

If the price is within the buffer value, the trade will be rejected even if another enabled strategy gives a trade signal. The calculations are based on the previous day ending at UTC time of 0000 and are as follows.

PP = (max + min + close) / 3;
R1 = (2 * PP) - min;
S1 = (2 * PP) - max;
R2 = (PP - S1) + R1;
S2 = PP - (R1 - S1);
R3 = (PP - S2) + R2;
S3 = PP - (R2 - S2);

For example -
S1 = 1.0000, Buffer = 5, Price = 1.0002, Trade will be rejected because price is less than 1.0005
S1 = 1.0000, S2 = 0.9970, Buffer = 5, Price = 0.9980, this filter will not reject the trade.
R1 = 1.0000, Buffer = 10, Price = 0.9992, Trade will be rejected because price is greater than 0.9990
S1 = 1.0000, S2 = 1.0030, Buffer = 10, Price = 1.0015, this filter will not reject the trade.

The Buffer value is best optimized.

Todays Discussion:

Fibonacci - is a sequence of numbers where the next number is derived by adding the most recent number to the current number.
So a sequence would be 1,1,2,3,5,8,13,21,34,55. This is replicated in nature by the growth of items such as shells where the ever increasing spiral generates an extra quarter circle by added the previous number to the current number. Behaviour in the market is deemed to mimic the behaviour of nature. When the market declines or grows, the progression or regressions are viewed in these quarter circle steps so a retracement back to a previous level say from 13 to 8 is deemed as a 38.2% retracement which is the ratio of (13-8 )/ 13 * 100. A retracement by 2 steps is (13 - 5) / 13 * 100 which is 61.8%.

The 38.2% and 61.8% retracements are defined as significant support levels and to a lesser extent, the half way point of 50% is also a support level and the 100% retracement is also a support level. There are also similar resistance levels on the upside if the price only falters slightly and continues to rise.

For example -
38% retracement = 1.0000, Buffer = 10, Price = 1.0006, trade will be rejected because price is less than 1.0010
62% retracement = .9970, Buffer = 5, Price = 0.9980, this filter will not reject the trade because it is outside both buffers (1.0000 -.0010 and 9970 + .0005)

Traders Gift recognizes the Support levels as potential levels to be regarded in a similar manner to Pivot levels discussed yesterday and provides a filter to disregard trades approaching these significant levels when other enabled Strategies may give buy or sell signals. As with Pivots, the Buffer value is best optimized with each Currency pair along with the number of Lookback bars to be considered when looking for maximum and minimum prices.

This thead has gone quiet looks like. Dave, thank you for the posts you're still making. I still read those and sometimes it gives me clarity on how each of them work. Your videos were helpful, and I hope you continue to create those videos. If most have taken the communication to emails or PMs, then I can understand the quietness here.

Just wanted to give you an update that starting today, I switched to a new broker and I'm going live with small number and using RSI and PSAR. Only on 4 pairs for now. (EURUSD, GBPUSD, AUDUSD, EURJPY). I'll keep you updated on this. I think I might actually add a explorer thing when I get some time.

Samir

The quietness on the thread is directly due to being moved to commercial and this was inevitable however it does not distract me from continuing to add value because this is still a work in progress and my work in the future will be related more directly to the management of trades. I do appreciate your input and it is encouraging to see more than just taking which seems to be part of human culture with the advent of IT.

Yesterday's discussion of Fibonacci was in my mind one of the more important discussions and if you overlay fib levels on any trading period, you will understand market behaviour more clearly. Fibonacci theory, in my opinion, is much more important than Elliott Wave theory and is one of the least understood areas of technical theory.

New releases continue to be the big driver in the market rather than technical indicators and I do envisage having more detailed attention to the market movements during these periods and associated money management. The videos and daily explanations will continue and I look forward to putting it all together towards the end of the series. Whilst Alex8585 may have been quiet on the thread, I value his email input greatly and behind the scenes there is much more happening and most of the regulars do now communicate by email particularly with highlighting any errors encountered. Having achieved stability in the programming area, I'm hoping the thread will mature and the silly posts will disappear.

The next move I believe will relate to increased trading in stock CFD's and the emergence of rival software to MT4 such as CTrader. One potential trap is the emergence of increased gearing levels and associated costs related to commission and spreads. For example, a 1 pip spread at 1000:1 gearing level costs 10% of your invested capital and I can see more moves by the regulators to reduce risk exposure such as with the US regulations and this will lead to the emergence of stock CFD's with generally gearing ratios of 40:1 or less.

Just wanted to say that I am quietly following and reading all the thread, this is a great tool and will take it slowly with forward testing.

Dave's explanations about indicators are great, concise and easy to understand.

Hi Dave,

Thank you very much for your endless work for improving this EA. I am very sure, a lot of traders are using this EA, despite not coming forward to claim it. For me, I am very busy with some personal matters theses days and try to read your daily posts when I am free. I am testing MACD_CDL method with additional volume filter (MACD_CDL_Vol) with 7 majors. I think this will help me to make gains with low drawdowns.

Todays Discussion:

Support and Resistance - These terms refer to significant levels in the past that have proven to be potential turning points in price. They can be, as mentioned in the previous 2 daily discussions, Pivot Levels or Fibonacci levels but specifically this filter identifies price channels whether they be ascending, descending or horizontal channels that represent the upper and lower levels of price movements within the last N bars where N is the Lookback Bars.

As with Pivots and Fibs, the allowable buffer before the filter cuts in, is the Pips Buffer and if the price is within the buffer, the trade will be rejected even if an enabled strategy gives a trade signal.

To conclude the last 3 topics regarding Support and Resistance, give consideration to a Price based Straddle with sufficient buffer to allow for a pull back if you consider that a break of support and resistance may involve a significant price movement.

Todays Discussion:

Divergence - This is a situation where the line joining the peaks of a momentum oscillator such as RSI or MACD in a rising market forms a downward line or the line joing the troughs on a falling market forms an upward line thus giving a direction opposite to price movement. This is indicative of a price reversal and is a reliable indicator. The oscillator is simply indicating that momentum in the direction of price is showing signs of exhaustion.

In Traders Gift, it can be used in conjunction with other indicators as a confirmation of a pending price reversal. You only need to nominate the Lookback Bars to take into account to find divergence. This indicator is reliable over all timeframes but is recommended at time frames 60 min or greater.

You can optimize the value of the Lookback bars but I would suggest values above 40.

Hi Dave,
Thanks for your EA. i am testing.

hi dave im interesting of your expert advisor and also auto calculation
would you tell me detail about your product?
if i buy special offer 2 what have there?
if i buy special offer 1 what have there?
could you tell me detail im hard to understand
sory for my bad english
thanks dave

For $49 - Auto calculation - 4 Reference Sets x 14 currency pairs - 56 Optimized Sets. You run at any time. Data is updated weekly. Plus you can create your own Reference sets.

For $69 - Auto calculation - 12 Reference Sets x 14 currency pairs -168 Optimized Sets. You run at any time. Data is updated weekly. Plus you can create your own Reference sets. On a monthly basis, the calculations are optimized, posted and monitored on the website.

For $20 first month and $10 on subsequent months on a casual basis - 168 Optimized Sets optimized, posted and monitored for 1 month on the website.

Traders Gift EA - Source and Executable are free.
Strategy Optimizer Standard is free.
2013, 2014 and 2015 - 1 minute data for 14 currency pairs is free (updated monthly)

Access here.

Todays Discussion:

Candlesticks - Traders Gift EA and Strategy Optimizer recognize the following candlestick formations

BullishEngulfing
BullishPiercingLine
BullishKicker
BullishHarami
BullishAbandonedBaby
BullishMorningStarDoji
BullishInvertedHammer
BullishThreeWhiteSoldiers

BearishEngulfing
BearishDarkCloudCover
BearishKicker
BearishHarami
BearishAbandonedBaby
BearishEveningStarDoji
BearishShootingStar
BearishThreeBlackCrows

For descriptions of the patterns, I suggest you visit this site - http://stockcharts.com/school/doku.p...ern_dictionary

The bullish patterns generate buy signals and the bearish patterns generate sell signals. The pattern completion is taken to be completed at the last completed bar if the default MaxBarsAgo setting (Lookback Bars) is left at 1. I would suggest if you are looking at this filter in conjunction with other Strategies that you expand the setting out from the default of 1.

It is possible to combine some Settings and have no defined Strategies and this is one of those cases where a Filter such as Divergence could be combined with this Filter (expand the MaxBarsAgo out to 5). That way the completed patterns can occur anywhere with the the last 5 bars. Some of the patterns take up to 5 Bars to form the completed pattern and this is automatically taken into account.

hi dave,
sory for asking more
if i buy special offer any of it
i would have .set already optimized from you?
is that correct?
and monthly will be new set for 1 month?
and for 69$ how many can trade (Trader Gift) for major pair or cross in balance 1000usd?
hope you can reply me thanks Dave

The $69 version has 168 optimizions included and a new 168 will be included every month. You can also create them yourself from the 12 Reference Sets included .

The $49 version has 56 Optimizations available but you create them yourself from the 4 Reference Sets included with the 14 currency pairs.

The $20 offer has 168 optimizations included for 1 month only. ($10 after that on a casual basis). No upgrade of Strategy Optimizer.

Todays Discussion:

Volume The term Volume is a misnomer. It should really be called number of trades and is indicative of the number of orders and does not reflect the total order size. That is one trade of 20,000 is counted the same way as one trade of 20,000,000,000.

Having said that, an increasing volume is indicative of increasing interest whether it be Buying pressure or Selling pressure. Traders Gift gives a confirmation of a Buy or Sell signal from another Strategy if the Volume is increasing and this filter is enabled.

If the volume does not increase from the second last bar to the last bar, any trade indicated by a Buy or Sell signal from another Strategy or Indicator will be invalidated.

Todays Discussion:

Setting Up Optimizations -
Firstly a discussion on the need for optimizations. Each currency pair has an individual average daily trading range. So if you are on a long term trading plan, you need to account for the daily fluctuations. Similarly for other trading plans you need to account for the normal ebb and flow of market movement. What may be a 200 pips movement of GBPUSD is only represented by a 90 pip movement of the NZDUSD, so any pip setting in your Strategies needs to be optimized for the currency pair that you are using. Similarly a 10/30 EMA crossover on GBPUSD has a different implication to a 10/30 EMA crossover on NZDUSD and that is why all indicator readings need to be optimized for each currency pair.

What is particularly significant also, is that we are only determining what has worked well in the past and of course that may not work as well in the future. The term "curve fitting" relates to getting the best possible return off previous market movements and applying them to future trading. Some indicators do have standard settings such as MACD 12,26,9, & RSI 14 & 200 EMA but the purpose of optimizations is to find out what is reliable over independent periods in the past. My own theory is that it is a constantly changing ball park driven primarily by fundamental economic factors. There are some age old Support and Resistance levels such as Fibonacci and Daily Pivots.

Over the last 4 months, the published Optimization, MACD Candle, has had a great run on the optimization figures from 1 Nov 2014 to 31 Jan 2015 but it looks like those figures may have had their run and that is why I suggest optimizing on the last 3 months figures alone. Not only does it cut down on optimization time, but for example, what was US monetary policy or the state of Greece's borrowing from the EU, 2 years ago, has zero bearing on the economic situation today. So what I am saying to you is that current technical indicator values reflect the thinking in the current economic situation and that is why we need to constantly re-optimize.

Traders Gift gives you an alternative means to carry out your optimizations and both MT4 and Strategy Optimizer optimizations are covered in the video here.

Working with Optimizations

How to make effective use of Optimizations - If you have 10 factors to optimize, there are 10 billion potential scenarios to calculate. Bring that back to 8 and you have 16.8 million and 6 you have 46,700 so it is very clear that if you can reduce the number of variables and significant time saving can be made. There are some rule of thumb figures from experience I can provide. Based on an exchange rate of 1.0000, RSI 14, MACD 12,26,9 EMA 20/60 and nearly all of the standard settings as recommended for indicators need not be optimized. So for currencies like USDCHF which are close to that figure of 1 these settings can be left as is. However when you are considering USDGBP these settings need to be adjusted.

Some of the money management variables can be left as is with smaller impact on the final balance. At exchange rates near 1, SetStopLossToBreakEven = 30, MinPipGain = 30, DecrStopLossPercentage = 5.

Percentage of Equity may need to be optimized with SL Multiple but to save time, 2% is a safe setting.

My own recommendations. Timeframe 60 mins
Percentage of Equity 2%
Optimize Stop Loss
Optimize Stop Loss Multiple
Optimize Take Profit Multiple (Take Profit will be set automatically by this multiple)
Breakeven 30 pips
Min Pip Gain 30 pips
Decrease Stop Loss Percentage 5

Maximum of 2 Strategies and/or Filters (3 if you cut down on optimized values). With 2 factors, take out the look back bars of one of the Strategies to 5. (Filters generally do not have this setting but some do have look back as the numbers of periods from which to derive information. For example Fibs, S/R, Divergence. Always optimize that setting). Consider not optimizing standard indicator values if the optimization is time consuming. Look back bars on 1 strategy do not need to be optimized.

Lastly and most important, if you come across a good optimization, save it and try it out with other currency pairs. Remember, when you save a .set file, all the factors which indicate optimization are also saved unless you deselect them before saving. So if a save is made without any deselection, you will have to deselect any optimization ticks on reload if you just want to return to the best optimization.

Hi David, when running the optimizations between two dates what happens to the trades that are open on the end? Are they closed as is by that time?

One other question, for what I have tested the best thing is to keep changing .set files week after week after running last 3 months optimization, I totally agree that the market is volatile and we need to keep adjusting, but is 3 months the best time interval, shouldn't it be 1 month?

Thanks.

At the end of an optimization, the nett equity position is reported as a profit or loss on any open trades.

Regarding the length of time for backtesting, it can take up to 1 month for an EA to even get established particularly with an increase in wager value. In the past I have experimented with periods from 2 weeks to 6 months and feel that 3 months is a balance for meaningful statistical data and current market performance.

Todays Discussion: Refer Post #1301

How To Use Strategy Optimizer. Strategy Optimizer is an alternative program to MT4 Strategy Tester for performing optimizations of historical data to create set files (records of inputs and optimized values) for use within the Traders Gift EA.

Whilst it is capable of reading and writing these files, the files are not usuable by any other other EA's however the optimization values are indicative of the performance of the selected Strategies and Filters.

There are 2 screens, The input screen and the results screen and a common toolbar which contains all the command buttons.

The Command buttons are -

Select Data - A File dialog box will pop up allowing selection of the Data Source - use the free data supplied - 1 Min data (yyyy.MM.dd, hh:mm, Open, High, Low, Close, Volume). Before selecting Data, ensure the From and To Dates are nominated and the Timeframe required are set.

Start Optimization - This button starts the optimization after all required inputs are completed.

Cancel Optimization - To stop the optimization during the period of optimization. You may require 2 presses of this button to stop the process
Show Trades - After optimization is completed and the results screen is shown, this will show a list of trades associated with the selected optimization result and a candlestick graph centered on the particular trade selected together with the selected indicators. The button caption will change to "Hide Trades" to return to the results summary of the selected optimization.

Show Inputs - From the results screen to return to the inputs screen. The caption will thenb change to "Show Optimizations" to return back to the results screen.

Open Set File - Once a data source has been selected, this button is enabled to allow you to load a previously saved set file. If the set file was saved with Optimizations, these boxes will be ticked. To return to the final result of the loaded set file, deselect the tick boxes before running the optimization.

Save Set File - Save the result of the currently selected optimaization together with the state of any ticked boxes.

Easy Mode - Shows a simplified input screen with all enabled strategies and filters shown on 1 tab.

Auto Calculation - Single button press to run all Reference Set optimizations without any other input on all 14 currency pairs. (Available on Auto version only)

Print Window - prints the content of the current window to a selected printer.

Exit - Ends the program

Help - Displays the PDF help file

About - Displays the current version number and date.

The Input Screen - 4 areas

Money Management - All numerical inputs are optimizable.

2 buttons
"Reset to defaults" - sets selctions back to program start. that is SL , SL Multiple, Use Trailing SL, TP Multiple, all selcetde for optimization. RSI strategy selected - all values optimized except Lookback.
"Reset optimizations" - All boxes untricked except Use Trailing Stop Loss

Other Inputs - not necessary for optimization but changes will be saved in any saved set file.

Strategies and Filters - A tabbed interface - Total of 12 Strategies and 9 Filters. Use the left and right arrows on the far right to display other input boxes. Final tab is used in the Easy mode to display a summary of the previous 21 tabs.

Selected Options - As any tab is enabled, a summary of selections will be shown when another tab is selected or another input box on the left is selected.
When all inputs are completed - Press the "Start Optimization" button

The Results Screen - shown automatically when optimizations are completed.

Optimizations - This is a list of completed optimizations with noteworthy results. Only results which improve on the previous best result are shown. Select any line to display a graphical summary to the right, and selected options and statistical information below. The Day of Week graph (bottom right) can be changed to Hour of Day. These days and times relate to when the trade was opened.

By clicking on the "Show Trades" button, each trade that took place within the selected optimization, will be displayed. To the right, a candlestick chart together with selected Strategies will display, centered on any selected trade. Button caption will change to "Hide Trades" to return to the original screen.

Selected Options - shows the input information.

Statistics - gives the overall information of the selected optimization. Use the "Print Window" button for a pictorial record.

Chart Area - gives graphical information of the selected optimization including -

Main Chart - growth of equity with each trade and the blue bars at the bottom showing size of each wager - scale on RH side.

Wins/Losses - 2 charts

Longs/Shorts - Buy trades and Sell trades

Day of Week - when trades were opened. Can be changed to Hour of Day.

Write Optimization Results - (Button on top right) will save a complete record of all optimization reults within the current session (from program start until button press) in a csv format best viewed in a spreadsheet.