Forex EA (Expert Advisor) specifically refers to automated trading systems that run on MT4/5 terminals. EA can automatically monitor the market and execute orders 24 hours a day, effectively avoiding the impact of time, physical strength, emotions and other factors on manual trading. For more details, please see the Appendix at the end of the article.
I created Seagull EA in early 2021 trading NZDCAD only. The key logic is to follow the major trend and/or the divergence of higher timeframes and look to entry on the lower time frames. If the market is still moving forward, Seagull EA will look to add some limited positions in the same direction. (To see Seagull Algorithmic System in detail)
From 2002 to now, NZDCAD trades in a broad 0.6154 to 0.9926 range. From February 2009 to November 2016, NZDCAD was in a strong uptrend. After 2016, the range is more tight and shows strong properties of mean reversion. The pair can well hedge the risk of USD.
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Chart 1 NZD/CAD Monthly Chart
1. Seagull EA can work on both fixed lot or automated lot sizes according to the balance. No news filter is involved, due to it can not be backtested. As well as, not all news would generate the opposite moving of the market to the EA.
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Chart 2 Tickdata Backtest of Seagull EA (Fixed 0.01 Lot per trade)
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Chart 3 Tickdata Backtest of Seagull EA (Auto Lot Sizes)
2. In the fixed lot Tickdata backtest, the Expected payoff is 6.0 pips, the spread in the backtest is 3.0 pips. There is total 9.0 pips’ tolerance in the trading cost, ideally it can work on most of the Brokers.
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Chart 4 Expected Payoff in the Fixed Lot Tickdata Backtest
3. The Tickdata backtest is from 2006 due to no more data being available before that. Seagull EA runs pretty well from 2009 to 2016, when NZDCAD in a strong uptrend. Please see Chart 1, Chart 2, Chart 3.
4. Seagull EA is not a night scalper, the orders are almost averaged within 24 hours.
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Chart5 Trading Hours of Seagull EA
5. We adjusted the timing of the Tickdata, the backtest result is almost the same.
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Chart 6 Tickdata Backtest of Seagull EA from 1979
6. No over-optimization in Seagull EA: although it was created in 2021, the track record of the live account is solid to now.
Chart 7 Seagull EA on Live Account from 2021 to Now
Conclusion
1. Seagull EA has had compelling performance in the Tickdata backtest from 2006 and live trading from 2021 to now.
2. Assuming that NZDCAD remains range-bound without a clear range break out in the coming years, we have every reason to believe Seagull EA can at least maintain the current performance.
Appendix
Forex EA (Expert Advisor) specifically refers to automated trading systems that run on MT4/5 terminals. In general, EA is based on proven manual trading methods and experience, built with various technical indicators and coded in MQL language. EA can automatically monitor the market and execute orders 24 hours a day, effectively avoiding the impact of time, physical strength, emotions and other factors on manual trading. EA is one of the most important trading tools for both professional and retail traders.
In addition, through rigorous and scientific backtesting, we can not only test whether the key logic of the EA is feasible, but also have a reasonable expectation of the risk and reward of trading performance in the future.
However, MT4/5 EA is not omnipotent. the MQL language is similar to the C language, the function is relatively simple. Some complex and/or advanced trading logic cannot be expressed well. Then we need to use Java Script and other languages in eSignal, Reuters Eikon, CQG or other professional platforms to build the trading system.
The series of articles "Commercial EA Review by LinoCapital" aims to provide readers with some principled guidance in selecting and backtesting an EA through our knowledge and experience. Welcome to all kinds of feedback and discussion.
We hope all the traders succeed. Good Luck!
This is a sponsored post. The opinions expressed in this article are those of the author and do not necessarily reflect the views of FXStreet. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Editors’ Picks
EUR/USD clings to small gains near 1.1750
Following a short-lasting correction in the early European session, EUR/USD regains its traction and clings to moderate gains at around 1.1750 on Monday. Nevertheless, the pair's volatility remains low, with investors awaiting this weeks key data releases from the US and the ECB policy announcements.
GBP/USD edges higher toward 1.3400 ahead of US data and BoE
GBP/USD reverses its direction and advances toward 1.3400 following a drop to the 1.3350 area earlier in the day. The US Dollar struggles to gather recovery momentum as markets await Tuesday's Nonfarm Payrolls data, while the Pound Sterling holds steady ahead of the BoE policy announcements later in the week.
Japanese Yen adds to strong gains and drags USD/JPY to 155.00 amid hawkish BoJ bets
The Japanese Yen extends its steady intraday ascent through the Asian session on Monday, dragging the USD/JPY pair to the 155.00 psychological mark in the last hour. Against the backdrop of the recent shift in rhetoric from Bank of Japan Governor Kazuo Ueda, an improvement in business confidence reaffirms market bets for an imminent rate hike this week.
Editors’ Picks
EUR/USD clings to small gains near 1.1750
Following a short-lasting correction in the early European session, EUR/USD regains its traction and clings to moderate gains at around 1.1750 on Monday. Nevertheless, the pair's volatility remains low, with investors awaiting this weeks key data releases from the US and the ECB policy announcements.
GBP/USD edges higher toward 1.3400 ahead of US data and BoE
GBP/USD reverses its direction and advances toward 1.3400 following a drop to the 1.3350 area earlier in the day. The US Dollar struggles to gather recovery momentum as markets await Tuesday's Nonfarm Payrolls data, while the Pound Sterling holds steady ahead of the BoE policy announcements later in the week.
Gold stuck around $4,300 as markets turn cautious
Gold loses its bullish momentum and retreats below $4,350 after testing this level earlier on Monday. XAU/USD, however, stays in positive territory as the US Dollar remains on the back foot on growing expectations for a dovish Fed policy outlook next year.
Solana consolidates as spot ETF inflows near $1 billion signal institutional dip-buying
Solana price hovers above $131 at the time of writing on Monday, nearing the upper boundary of a falling wedge pattern, awaiting a decisive breakout. On the institutional side, demand for spot Solana Exchange-Traded Funds remained firm, pushing total assets under management to nearly $1 billion since launch.
Big week ends with big doubts
The S&P 500 continued to push higher yesterday as the US 2-year yield wavered around the 3.50% mark following a Federal Reserve (Fed) rate cut earlier this week that was ultimately perceived as not that hawkish after all. The cut is especially boosting the non-tech pockets of the market.
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