Algorithmic Trading/ea

But, is algorithmic trading profitable?

The answer is yes, but it depends on your strategy, risk management, and market conditions. Our team of experts can help you develop and backtest your strategies to ensure they are optimized for success.

We understand that learning algo trading can be daunting, but we offer comprehensive training resources and support to help you get started. We can teach you the skills you need, including programming and mathematical knowledge, to be successful in algo trading.

So, why choose Brokerguide for your algorithmic trading needs?

BROKERGUIDE WEALTH EA

The Broker Guide Wealth EA is a trading system that uses various independent grid sequences of orders to trade against retail break-out trading strategies on specific liquidity levels. The EA continuously monitors breakouts of levels in the oversold and overbought areas where retail traders enter the market after confirmation, as taught in common trading books. When this happens, the Broker Guide Wealth EA trades against these retail positions with targets set to stop loss clusters (liquidity zones) located below/above swing lows/highs where most of their stop losses are placed.

Many of us have attempted manual trading, purchasing trading books or spending money on trading courses that often teach similar information. However, 95% of these authors are great teachers and skilled at explaining hindsight charts, demonstrating where to buy and sell. If it were as easy as in these books, we would all be billionaires already. The Forex market, especially, is highly manipulated by large speculators and driven by central bankers' Interbank Price Delivery Algo (IPDA). Currencies are products of central banks, and they dictate the price, no matter how much any groups buy or sell. The IPDA delivers prices where necessary and where business is conducted. It continually seeks liquidity, which can take the form of stop losses of retail traders. By understanding retail traders' behaviour, we can identify where the liquidity is and where the IPDA will likely take the price next. The Broker Guide Wealth EA trades against break-out traders' worst entries with the aid of the grid.

Liquidity is created when traders place their stops in similar zones below swing lows. Stop loss clusters are formed, which attract large speculators who need to fill orders. These large speculators are not interested in destroying retail traders, but they require someone to sell to them so that they can buy. Therefore, the price often drops to these liquidity zones before the expansion move, and the Broker Guide Wealth EA seeks to participate in these market movements with multiple positions and targets set to the liquidity zone. The market structure picture below shows the levels where break-out traders typically enter the market and where they place their stop orders.

The Broker Guide Wealth EA exploits the weakness of break-out trading, which is the tendency of traders to enter the market too early or too late, before liquidity is loaded. While break-out trading may work at times, it's mostly fake if it's close to the daily ATR high/low levels. Therefore, trading against break-out systems is more profitable in the long run. The Broker Guide Wealth EA uses multiple independent grid sequences of orders to target these break-out systems.

To better understand how the EA works, you can take a look at the example trades in Metatrader shown in the picture below. The EA places trades once the price breaks new highs in the overbought conditions above the daily ATR and in pre-determined liquidity levels, which can be adjusted in the EA settings. I recommend running visual backtests for a better understanding of the EA's performance.

The Broker Guide Wealth EA uses a unique approach to trading against breakout traders. It takes advantage of oversold/overbought conditions filtered by the ATR and IPDA ranges to find the best liquidity entry levels. The system is designed to be flexible, adjusting to NY time for a more accurate view of the market. The logic behind the EA is based on the number of waves of breakouts, which indicates the number of traders in the market and the size of the stop-loss clusters. By employing a grid sequence of trades, the system can average entry points and diversify targets. This approach is more efficient than a simple grid that adds positions with predefined pip gaps. The Broker Guide Wealth EA focuses on trading from liquidity level 3 and above, as it offers the best entry points with oversold/overbought conditions. The higher the liquidity level, the better the accuracy and the fewer trades, resulting in less drawdown. Conversely, the lower the liquidity level, the more trades and higher drawdown, but less accuracy.

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Commodity pairs triangle

The Broker Guide Wealth EA has the ability to trade on a wide range of FX pairs, but it is most effective when trading the commodity pairs triangle, consisting of AUD/NZD/CAD. These pairs are highly correlated and move together, providing stability and low risk for traders. By trading just the triangle of these pairs, i.e., AUDNZD, AUDCAD, NZDCAD, it is possible to make stable gains every month with a minimum capital of $1000. This is demonstrated by the low-risk performance of The Broker Guide Wealth EA on a $10K USD account, with the same percentage gains achievable on a $3000 account. While it is possible to trade the commodity portfolio on a $500 account with special settings, it is high-risk trading as shown by The Broker Guide Wealth EA's high-risk account.

Please note that this is not financial advice, but it is recommended that traders with less than $5K capital use a cent account instead of a classic account. This is because The Broker Guide Wealth EA performs better on cent accounts due to more precise lot sizing and faster accumulation of profits, without the need for high-risk trading as required on a classic account to achieve the full potential of the EA.

Capital Guard

To protect our accounts, I have implemented a feature called Capital Guard with several settings to prevent experiencing drawdown on all pairs simultaneously or having all positions closed due to a significant decline in the market.

The Capital Guard feature has a few key settings.

• Firstly, if the value of 70% drawdown is reached, the EA will close all trades and stop trading to prevent further losses.
• Secondly, the Secure Margin Drawdown setting, set at 15%, prevents the EA from trading on other pairs until the drawdown percentage drops back to the value of Recovery Margin Gain, which is set to 5%. This means that trading will only resume once the drawdown has recovered and the account is more stable.
• Finally, the Event Timer Period is set at 1000 milliseconds to ensure that the EA checks the account regularly to detect any potential issues.

These measures are designed to safeguard our accounts and prevent significant losses during unexpected market events or unfavorable market conditions. By using these settings, we can minimize risk and maximize the potential for profit with greater peace of mind.

I can see that in December 2022, AUDNZD crashed over 800 pips without a pullback. This was a dangerous situation for my EA. However, on the equity chart below, I could see that the EA closed a loss lower than 30% thanks to the capital guard settings I had in place. I understand that capital guard settings are up to me, but I know that if I were to lose more than 50%, I would need a 100% gain to recover, and it could take more than 6 months. So, I would rather lose 30% with capital guard and start over. Although it's painful, it's better than losing my capital completely. I believe that my EA will most likely recover the loss in a few months, and the year can still end with more than average profit.

What can you expect from this EA?

Well, it's not a get-rich-quick scheme, but based on my live results and backtests, you can expect a stable partial income. I have to note that backtests may not reflect real trading conditions accurately, so I calculate with deviations of up to 15% higher drawdown and 15% lower profits than what the backtests show.

Based on a 10-year backtest for the basic commodity portfolio with the most optimal settings, the average yearly profit ranged from 79% to 186%, with a maximum drawdown of 35% in extreme conditions for a single pair. These are amazing results, but it's important to note that we cannot guarantee the same results in the future. As traders, all we have is a statistical edge.

The Mars Secure margin drawdown function prevents simultaneous drawdowns on all pairs. With optimal portfolio settings, the worst-case drawdown should be below 45%. With relatively conservative settings, you can expect between 5-10% average monthly profit with a usual drawdown of 15%, and the worst drawdown should not exceed 45%.

You can view the 10-year backtests of single pairs with different auto lot settings on the tab below. On the right side of the tab, you can see the calculated average yearly profit and drawdowns.

As a disclaimer, it's important to note that the following backtest is based on historical data from the past 10 years. It's important to keep in mind that market conditions can change and behave differently, especially in times of recession or economic upheaval.
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Installation

For installing the EA, all the necessary settings mentioned above have already been implemented. You only need to select the settings that suit you best. If you need assistance, you can always contact me, but please note that I am not a financial advisor. I only offer the tool that has worked well for me and based on probabilities, it could continue to do so in the future.

The main advantage of trading with expert advisors is that it eliminates emotional-based decisions and mistakes that we as humans could make. As for me, I suggest not being greedy, making regular withdrawals, and allowing this tool to generate a steady income for you. However, I want to clarify that I'm not a financial advisor, and it's ultimately up to you to decide how to use this tool.