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: US Dollar to remain pressured until uncertainty fog dissipates
Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.
GBP/USD reclaims 1.3600 and above
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USD/JPY drops back below 157.00 on Japan's verbal intervention
USD/JPY has come under moderate selling pressure below 157.00 in the Asian session on Monday. The Japanese Yen lost ground to near 157.70 following Japan’s ruling Liberal Democratic Party's outright majority win in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi. However, JPY buyers jumped back and dragged the pair southward on FX verbal intervention by Japan’s Finance Minister Katayama.
Editors’ Picks
USD/JPY drops back below 157.00 on Japan's verbal intervention
USD/JPY has come under moderate selling pressure below 157.00 in the Asian session on Monday. The Japanese Yen lost ground to near 157.70 following Japan’s ruling Liberal Democratic Party's outright majority win in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi. However, JPY buyers jumped back and dragged the pair southward on FX verbal intervention by Japan’s Finance Minister Katayama.
Gold holds gains near $5,000 as China's gold buying drives demand
Gold price clings to the latest uptick near $5,000 in Asian trading on Monday. The precious metal holds its recovery amid a weaker US Dollar and rising demand from the Chinese central bank. The delayed release of the US employment report for January will be in the spotlight later this week.
AUD/USD: Buyers eyes 0.7050 amid upbeat mood
AUD/USD builds on Friday's goodish rebound from sub-0.6900 levels and kicks off the new week on a positive note, with bulls awaiting a sustained move and acceptance above mid-0.7000s before placing fresh bets. The widening RBA-Fed divergence, along with the upbeat market mood, acts as a tailwind for the risk-sensitive Aussie amid some follow-through US Dollar selling for the second straight day.
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Bitcoin price recovers slightly, trading at $65,000 at the time of writing on Friday, after reaching a low of $60,000 during the early Asian trading session. The Crypto King remained under pressure so far this week, posting three consecutive weeks of losses exceeding 30%.
Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle
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