What EAs Do You Need to Order?
- One Robot, No Robot
- Trend and Flat EAs
- Stop, Averaging, Martingale
- Robots with Diverse Market Analysis Methods
- Timeframes and Assets
- The Final Portfolio
- In Conclusion. What Should I Do?
Suppose you are wild about a particular market analysis method. You try to apply it here and there blindly. In the hope a robot will be able to make a profit eternally, you order a single EA based on this approach.
Though, the robot cannot make money for a long time. Each one has its lifespan due to regular market changes. In other words, each trading robot is designed to deal with a specific market condition.
One EA can't do the work of ten. There is safety in numbers. Only a portfolio (a set of robots) can cope with this task. To trade stably, you should replenish your portfolio with new EAs.
Trading should be managed by different robots. The diversification principle and asset allocation among non-correlating robots ensure portfolio stability and risk reduction. For instance, you can try a five-robot portfolio.
There are two market states: Flat and trend. That is why you should provide your portfolio with robots trading during a flat or a trend.
Robot №1. The trend robot is based on indicator analysis, e.g., the Ichimoku trend indicator.
One of the Entering Market Options Based on the Ichimoku Indicator. When the Candlestick Closes Beyond the Kijun Line (the Blue One), You Can Open a Sell Position
The trades with the stop-loss levels are located beyond the candlestick extremum. You can use the daily timeframe that is typical for the Ichimoku indicator. The trade is followed by the Kijun line and closed candlestick extrema.
Robot №2. The flat robot is based on the RSI oscillator.
Entry Market Point Based on the RSI Oscillator. The Buy Position Is Made When the Indicator Leaves the Oversold Zone. StopLoss Is Located Beyond the Nearest Extremum. Exiting Trade Is Carried out When the Overbought Zone Is Reached
Different money management methods (aggressive or conservative) diversify the portfolio. We will use the following EAs in our portfolio:
- Robot №1 — risk per deal is 1% of the deposit. Each trade obtains the stop-loss level.
- Robot №2 — martingale with 4% maximum risk per deal.
- Robot №3 — risk per deal is 1% of a deposit. Each trade obtains the stop-loss level.
- Robot №4 — averaging with the 4 % maximum risk per series.
- Robot №5 — pyramiding with a 3% maximum risk.
This approach provides portfolio diversification and current market testing to make sure the methods are efficient and cool.
The more diversified your portfolio is, the better it is. Many hands make light work. Use different analysis methods to generate your EAs:
- Indicator analysis
- Graphics analysis
- Fibonacci sequence
- Japanese Candlestick analysis
- Volume analysis, etc.
Two robots in our portfolio are developed using indicator analysis. Let us create other EAs applying the remaining aspects.
Robot №3. Let's use Japanese candlestick analysis for this EA. The most efficient candlestick configuration is Hammer. Broken signal candlestick extremum performs market entry in the opposite direction of Hammer. StopLoss is located beyond the hammer’s shadow. New candlestick extrema follow the trade.
Robot №4. This EA will be developed using graphics analysis. Broken extrema open trades in the opposite direction of breaks.
Robot №5. This robot can be created by applying Fibonacci sequences. The trade was opened after impulse and correction reached a 62% Fibonacci level. The stop-loss level is beyond the 62% limit, and TakeProfit is on the impulse extremum.
EAs trading with different timeframes and instruments is significant to diversify your portfolio.
If there is no trend on one asset, it may occur on the other ones. The trader should study the specifics of several instruments to use them in trading properly. The daily timeframe may contain a flat for several weeks. Although, there can be active daily movements (the profit potential).
The trader, like a fisherman, uses tacklers arranged in different places and catches fish with various baits. That is why you have to trade on different timeframes and assets.
There is a diversified final portfolio:
Robot №1. Trend robot. Indicator analysis. Ichimoku indicator. Money management is performed by risk per stop-loss trade is 1% of the deposit. Daily timeframe. CL oil commodity.
Robot №2. Flat robot. Indicator analysis. Indicator RSI. Money management is achieved by martingale with a 5% maximum risk per stop-loss trade. M5 timeframe. GBP/USD pair.
Robot №3. Trend robot. Candlestick. The Hammer candlestick configuration. Money management is executed by the 1% risk per stop-loss trade of the deposit. H4 timeframe. Gold commodity.
Robot №4. Flat robot. Graphics analysis. Fractal extremum retreat. Money management is performed by averaging with a 4% maximum risk per series. H1 timeframe. USD/JPY pair.
Robot №5. Flat robot. Fibonacci sequence. A 62% retreat. Money management is implemented by pyramiding with a 3% maximum risk. M15 timeframe. S&P500 index.
Remember! One robot does not make trading. One stick is easier to break than a bunch. So, you have to create an EA portfolio.
Diversification should be based on:
- Flat and trend robots
- Robots with different money management methods
- Robots with various market analysis approaches
- Robots with numerous assets and timeframes
A diversified portfolio provides stable trading and helps to overcome crises and lulls. United we stand, divided we fall, bro!
Do you doubt the reliability of the indicator? Want to check if there is no redrawing? Need an expert programmer to develop a custom Forex indicator? We will do it for you! Just fill in a form and get a free estimate of the price and time needed to develop the desired tool.