Filters limit open trades.
3 MACD robot is a series of several robots based on one MACD indicator. I would like to show a few mods, from simple to complex. Initially, the robot was made with one MACD indicator. The strategy is simple when crossing the fast moving slower, opened an order for buy or sell. The robot based on only one indicator gave a large drawdown on any timeframe. Although visually looking at the chart, it seemed that there should be a good profit, but in the flat, the robot gives a lot of signals. It is difficult to calculate the flat channel and therefore a lot of false breakouts are obtained.
3 MACD robot. The first restrictive filter.
Then, to solve the problem of the infinite opening of transactions at the intersection, made one filter, which did not allow to open the transaction, with an open order. After that, there were fewer false breakdowns. But, the problem is not over.
The second filter is to limit the opening of orders.
The robot enters the market immediately, not by pending orders. The problem arose the such. The robot opened the order then took profit. But, since the signal allowed to open another order in the same direction, the robot opened the order again. However, unfortunately often this opening was at the maximum near the turning points. The price turned around and instead of take profit, we received a loss.
It was decided at the intersection of moving averages:
1. Open only one order – in case of take profit or stop loss.
2. If take profit or stop loss is received, the robot no longer opens new orders until there is a new intersection.
These two restrictions on opening orders really helped to reduce the drawdown from 10-12 losses to 8-6, which allowed to take seriously the robot 3 MACD.
Three Windows or filter – three timeframes.
After several tests, good results were obtained on the drawdown. But, I wanted the best. Traders suggested adding a few more indicators as a filter. I object. Because I knew. that there is still potential that will allow you to add some features and thanks to this robot on MACD, will show the best results.
In addition, a few years ago I made a robot in it there were three stochastics, six moving averages, three macd and all indicators had Autonomous, independent settings. I have experienced thanks to this robot all the classic strategies that can be read in the textbooks on Forex result is deplorable. For a long period — loss of Deposit.
So I decided to choose a new direction one indicator, and the rest of any other filters. But, while we were thinking about filters, one trader suggested to make not one MACD, but three MACD in the robot and to enter the market on three timeframes. Thus, we will apply a filter timeframe. What this is not a new idea if you remember elder described a system of three screens.
As a result , our robot has another filter — three timeframes, thanks to which we make an entrance to the market. It turns out a more accurate input.
Did you manage to make the drawdown less? Yeah, a little, but it has not produced the desired minimum drawdown, though, you have to play around with the settings.
Now there are options in the robot settings, you can apply two indicators, or you can use one. In General, three indicators have expanded the functional settings of the robot. But, who wants, can use all three indicators or as before — to use one. How is the entrance? In the picture you can see three Windows open on different timeframes. When the fast moving average is the same in all three Windows. For example, above the slow moving average, the robot will open a buy order, and Vice versa.
Line of lots.
After the idea came to make three screens in the robot. It remains to deal with the management of capital. Many people’s money management ends with martingale. But, I knew from the tests that martingale is an aggressive trade. You can go into a huge drawdown on lots. And the result will be disastrous if your order works in plus, with any drawdown you always get the same lot from which you started trading.
For example, you trade the robot naturally with the same take profit. If you make a take profit of 1 to one in relation to the stop loss, you will always get only the initial lot when you win. Let’s say you have a serial drawdown.
Now we add all the lots we get with this series of 126 lots in the drawdown. Then you won and made a profit of 1 lot. It turns out the ratio of risk to profit, not very prudent. Some Deposit in drawdown takes more than 50 percent. In order to get half a percent profit.
Therefore, I did not use a multiplier in the robot. A line of lots was made, which allows you to set lots in any order. Here you can apply not only the martingale system, but any other trading algorithms. But, and this it turned out not enough. I’ll tell you about it later. Continue reading later.
So, in the robot was made a line of lots, it is possible to set different trading algorithms for money management. No doubt this is a big plus. However, in the future, after numerous tests, it was found that not all algorithms give a positive expectation, even if the profit relative to the stop loss is 2 to 1.
If you trade within a day, the ratio of stop loss to take profit of 1 to 2 is not always easy to get. Short stop loss will not put, you will go into a big drawdown, too big stop loss, already limits you on take profit. The volatility of the trading day is also limited. Admit. if the volatility of the day average 100 points to take profit in relation to stop loss 2 to 1 is already problematic. As a result, you can put a ratio of 1 to 1. This is the ratio of take profit to stop loss.
If you do a ratio of 1 to 1. For example, stop loss of 50 points and take profit of 50 points. You will not be able to use the line of lots to make different trading algorithms, you can only trade on martingale.
Therefore, I thought to make a double take profit. Double take profit allows you to make a variety of trading algorithms — aggressive and non-aggressive, while receiving a positive expectation.
In fact, it is good to do to take profit was always more stop loss. Therefore, to trade only inside one day. you should not focus because this trade will always be aggressive.