Currency: USDJPY, USDCHF, AUDUSD, USDCAD, EURCHF, EURGBP, GBPUSD, EURUSD.

Transcription

1 LMD MultiCurrency Developer: Drazen Ziskovic (Croatia) Currency: USDJPY, USDCHF, AUDUSD, USDCAD, EURCHF, EURGBP, GBPUSD, EURUSD. Attach to EURUSD only! Timeframe: D1 Strategy Description: LMD trades several currency pairs. It does not use any indicators, which is a good sign. The main signal is based on the open price of a Daily bar inside the channel defined by the High/Low of the last several days. LMD places a large StopLoss and TakeProfit values, however, it normally closes trades without reaching either level. You can also use the special feature called EquityProfitCloseLimit to close its trades when a certain profit level is reached. This feature is described later in this manual.

2 About the developer I am 33 years old and have a degree in economics. I became interested in trading the foreign exchange market eight years ago and I've been trading Forex live for more than six years now. I am primarily a discretionary trader and most of the time I trade with discretionary systems based on chart patterns. I do not use any indicators or standard analytical tools. In my trading I like to keep things as simple as possible because my six years of live trading showed me that this is the best approach. I became interested in automated trading at the end of 2006 when I saw the Automated Trading Championship (2006) organized by MetaQuotes. That is when I decided to learn programming in MQL and from that day I began to write and test automated trading systems. I have created many systems since then - some were more successful in live trading, others less so. One successful system was the one with which I won fourth place in the MetaQuotes Automated Trading Championship in Another successful was EA was a scalping system (created one year ago) specifically for high-volatility markets. With that one I managed to gain almost 2,000% in less than 3 months on live accounts, and with not too risky money management. The third successful system is the one with which I compete in the Forex Robot World Cup - LMD. In the beginning, I started to create automated trading systems based on indicators and standard analytical tools, but I learned that they don't have potential - they're not suitable for constantly changing market conditions. I realized that the most resilient systems are those based on chart patterns because they respond well to the constantly changing Forex market. So, for the last year I have been creating systems based on that approach. LMD- MultiCurrency is one of them. When I saw the Forex Robot World Cup advertisement sometime in October, I decided to participate because the prizes are really good and I was in a sort of financial crisis at the time. So, now I am happy because I am among the winners. At that time, I traded with one automated system (based on my chart pattern recognition algorithm) and it showed good results so I decided to do a few little improvements and modifications, then make it multi-currency and send it to the Forex Robot World Cup. I think I am among the winners because my Expert Advisor is really good. It has built-in knowledge acquired through many years of live trading and creating and testing various trading systems. Another reason is the ability to use a riskier money management strategy because the EA trades multiple currency pairs so we do not have all our eggs in one basket. I think that this risk diversification is the main reason that I am among the winners. I would like to thank the contest organizers for making this competition possible. It was a really great contest and it is even greater for me because I am among the winners. I would also like to congratulate all of the other winners and participants.

3 Developer describes his system in detail This is a multi-currency expert advisor designed to work with eight currency pairs: EURUSD, GBPUSD, USDCHF, EURCHF, EURGBP, USDJPY, USDCAD and AUDUSD. It is placed on the EURUSD daily chart. The expert advisor is based on a chart pattern recognition algorithm which consists of eight different sub-systems for each currency pair. Half of the subsystems check patterns formed by the last four daily candles, while the other sub-systems check the patterns formed by the last seven daily candles. These systems are not designed to recognize standard chart patterns, such as Head and Shoulders, Double Tops / Bottoms, Wedges, etc. Instead, they recognize high-probability patterns on the daily chart which have been isolated through careful optimization and an empirical testing process with the strategy tester of MetaTrader 4. Patterns obtained by optimizing and testing represent template patterns. The process of creating template patterns consists of two phases. The entire data period is divided into 2 sections and we begin by optimizing inputs based on the first half of the data period and check the results obtained by optimizing. The key component of the results is the consistency of the equity curve over the entire period but the drawdown is also important. The total profit or profit factor is less important. Patterns obtained during the first phase are then tested on the second half of the data period. If the results obtained are consistent with the results (equity curve, drawdown) obtained in the first phase then I integrate this template pattern into my system. I use this method to create each subsystem for every currency pair. When we want to open a new trade, we analyze the current daily candle data (4 or 7 days back) to identify similarities between the template chart patterns, and the current, actual chart pattern. To do that, we calculate various distances between the template pattern data and the current input data. If the distances obtained by calculation are less than those in predefined constants then we have a match and a position is opened. Due to noisy input data, direct comparison of the current data with the template will lead to an incorrect result. Therefore, data for both the current input and the relevant template are normalized to the 0-1 range. The LMD Expert Advisor is designed for one day ahead prediction. So, if the StopLoss or TakeProfit levels have not been reached when the daily candle closes, it exists the position at the open of the next daily candle. StopLoss and TakeProfit values are fixed for each sub-system - SLs are generally placed 47 to 65 pips away and TPs between 150 and 280 pips away so the risk-reward ratio is approximately 1:4. Money management is based on leverage so, when we calculate the size of the order, we multiply the account balance by the leverage value. A leverage value of 15 is approximately 7.5% risk.

4 Broker Choice LMD Multicurrency was designed to work on D1 price bars BUT the Open/High/Low/Close values can differ between brokers depending on the GMT Offset they use. Our own testing has shown that LMD will produce the most consistent results when run on brokers with a GMT offset of +1 (i.e. FXCM, IamFX, Alpari). Using LMD with brokers who have a GMT offset of +2 or 0 should be fine too but if your broker has a GMT offset beyond that range then you are likely to see noticeably different results and we suggest you run a forward test for a while and/or use conservative lot sizes until you feel comfortable with how the system performs. How to install this robot LMD trades several currency pairs concurrently if enabled in the settings. You should attach the EA only to a EURUSD D1 chart! Do not attach it to multiple charts or you run the risk of duplicate trades. Even though the EA is only attached to the EURUSD chart, it is very important that you keep D1 charts of all the other 7 pairs (USDJPY D1, USDCAD D1, EURGBP D1, GBPUSD D1, USDCHF D1, EURCHF D1 and AUDUSD D1) open too as LMD needs access to their price feeds to gather information from them. If you overlook this step then you will see a zero divide error being reported and trading will not occur.

5 Robot Settings LMD settings are pretty simple. The EA is doing most of the work automatically and does not have many settings to adjust. You simply define the MM style you want to use (Manual with a fixed lot size or Automatic MM) and set the currency pairs you want it trade. PlimusRefNr this is your Plimus Reference Number from your purchase receipt and is required to activate the EA. For your convenience, we display your Plimus Reference Number within the FRWC member area when you log in to your account Magic Number this allows the EA to identify its own trades if you are using several EAs and/or manual strategies on one account Lots defines the fixed lot size for each trade when Money Management is not used. Our opinion is that a lot size equal to 0.05 for each $1,000 of available equity is reasonable. That means if your equity is $5,000 then you could set Lots to 0.25 EquityProfitCloseLimit (defined as a %age of equity) When a certain percent of profit is reached, all open trades will be closed. For example if your deposit is $5,000 and you set your EquityProfitCloseLimit = 10 then if the account equity reaches $5,500 during the day, all open trades will be closed. You can experiment with this setting, varying it between 5 and 30, depending on your MM objectives and aspirations Microlots If True, the EA will trade using micro lots (0.01 lots) TradeUSDJPY/USDCHF/AUDUSD/USDCAD/EURCHF/EURGBP/GBPUSD/EURUSD these options allow you to specify which currencies the EA is to trade. In normal trading, enabling all pairs spreads the risk. The prime use of these options is to specify a single pair to analyze in the Strategy Tester which is only able to back-test one currency pair at a time. MoneyManagement If True, the EA uses a built-in money management system which, in our opinion, is only suitable for traders comfortable with higher risk.

6 LMD MultiCurrency Back-tests Here is the back-test for EURUSD with automatic lot management enabled. The EA builds a steady equity line all the way through and shows a very good final profit. Remember that due to MT4 limitations, it is only possible to back-test one currency pair at a time. You can study the detailed back-test report here: Here is the full back-test for EURUSD this time with a fixed lot size. Once again, the equity curve is almost perfect and it seems that the EA performs well in all market conditions:

7 You can study the detailed EURUSD back-test report here: LMD Back-tests on other currency pairs Other currency pairs also show great back-tests results. Take a look at the USDJPY back-test: You can study the detailed USDJPY back-test report here:

8 We have made back-tests for each of the currency pairs that LMD trades. Feel free to use the following links to study the detailed back-tests on each of the relevant currency pairs: GBPUSD AUDUSD USDCHF EURCHF EURGBP USDCAD LMD Live Trading LMD showed great results during the Forex Robot World Cup live trading phase, reaching over 200% equity increase at one point. You can study the detailed live trading report here: