The Participant from New Zealand, Michael Mayson has been involved in automated trading for not a very long time. All this time he was using his Expert Advisor ZelDelComp, which he presented in the Championship. Michael expalins the success of his EA so: “It is not taking great risks. We have seen some of the riskier strategies rise and then fall”.
Hello Michael. Let us congratulate you on being the leader of the Championship. Did you expect to be in the first line?
Thank you. I thought that my EA would be successful, but I was unsure about the opposition, so I really had no expectations of being #1. However, it is early in the Championship and as we have seen anything can happen.
What is the reason for your Expert Advisor’s success, in your opinion?
I think, at this point it is successful, because it is not taking great risks. We have seen some of the riskier strategies rise and then fall. It is also able to make a good profit without compounding, so when compounding is introduced it is like cream on the cake.
Did you use ZelDelComp in the real trading?
Yes, I am running this EA on a real account, but with less risk, typically 5% of balance per trade. I am getting similar results as in the competition.
What % of your balance could you risk in this EA?
I have set it at a conservative 10% per trade. I am wondering if I should have taken more risk in the competition, but so far it seems like a good decision.
What was the most important thing for you while you were preparing it for the contest: its stable operation, its profit factor, its reliability?
The most important thing was to be able to generate a stable profit over a long time hoping to capture as many of the market "moods" as possible. I optimized the EA to generate maximum profit for all of 2007 rather than just a 12 week period. It was also important to have reliable trading and take account of all the errors that can occur when communicating with the trade server. I used some ideas from Mathew Kennel, who has written some very good code for reliable trading. Of course the profit factor is also important - no profit = no good!
Can you describe one of Kennel's ideas that you realized in you EA?
Kennel wrote a suite of functions to replace OrderSend, OrderClose etc., which he called OrderSendReliable etc. The functions take care of errors by either retrying the command and/or adding a time delay.
The currency pair you selected, GBPUSD, is considered to be very risky. Why did you choose it?
You will see that my EA is always in the market unless it has hit a stop loss. Because of this, it enjoys the large fluctuations that are seen in this pair. The EA contains the risk with an adaptive stop loss and also adapts to the rate of change. I expect the EA to have over 60% successful trades with a Profit Factor > 4.
Judging by the comments, we can conclude that your Expert Advisor opens positions by pending orders only. Why do you use them?
No, I don’t use them. What you see in the comments is a remnant of some previous code.
How were the opening levels of these orders calculated?
I don't wish to go into much detail here, but this is based on a simple pattern recognition system, which is looking at price excursions around a smoothed price model. Most good ideas are built on work that has already been done and I am grateful to Yury Reshetov for his articles on Artificial Intelligence in the MQL4 forum.
It strikes the eye that there is no Take Profit placed. How does the EA close profitable positions? Why don’t you use a TP?
That is right. Each trade is closed by a reverse trade. I have found in backtests that this is a more profitable strategy than using Take Profit.
The Expert is attached to a one-hour chart. Does it use data from other timeframes or currency pairs?
No, only data from the 1 hr chart and from the GBPUSD pair.
The EA opens only one order at a time. Will it open more than one order if the total size of the position exceeds 5 lots?
Yes, it will open up to 3 orders of 5 lots each, but because of the conservative risk this won't happen for a while yet.
Michael, what analytical tools do you use in this Expert Advisor? Which ones are the most effective, in your opinion?
I have used Average True Range, ATR as a proxy for volatility and ADX as a proxy for rate of change. The main indicator driving trading decisions is one I have developed myself.
Tell us please about your indicator.
It is based on price excursions from a smoothed no-lag price model. That is all I want to say.
What trading method underlies your EA – countertrend or trading on swings?
It is trading on swings.
What trading techniques did you study and which ones are “the nearest to your heart”? For example, averages, Di Napoli, Fibo Numbers, etc.
I have no favourite techniques – in fact I have not studied any in detail. I have been involved in FX trading for only a year but I have concluded that with the power made available by MQL4 there is a great opportunity to go beyond the traditional chartist techniques.