EA Development Procedure ~ Build Logic with Indicator Advantage ~ Part 1
There are several important things to consider when developing EA.
① Do not collapse
② Be able to earn properly
③ Not optimized for only a specific market condition
④ The logic used has an edge against the market
⑤ There is an advantage in terms of time
There are many other points, but as an entrance this level should be fine.
However, it is generally not possible to fulfill all items from the start, so one or two of them are focused on as you begin development.
With that in mind, I will proceed with EA development focusing on
the item ④ “The used logic has an edge against the market.”We will publish the progress on developing an EA with this focus.
Since I will be creating with combinations I have not yet implemented, I am not sure what the result will be, but let’s proceed.
The logic to be used is “Bollinger Bands”
The target currency pair is “GOLD”
The data period for production is “from Dukascopy, January 1, 2010 to March 31, 2024”
The spread during testing will be “0 pips,” and in development stage it will be “3 pips.”
We will advance the EA development for GOLD under the above conditions!
First, to verify the logic’s edge,
“Only the entry logic will be used, and exit will be decided randomly.”
We will write the code under this condition.
For the entry logic, first“Breakout strategy where a buy or sell is executed when the candlestick breaks out of Bollinger Bands”.
The exit will be“randomly decided under certain conditions”.
After writing, we will set parameters and run tests.
The parameters are set as follows.
Take profit and stop loss fixed at 1000 pips
Timeframe is 5 minutes (we will test various timeframes later)
Set to randomly exit with a 4% chance when a new bar is generated for the open position
Repeat this test 10,000 times
Bollinger Band calculation period ranges from 5 to 100 in steps of 5 (20 options)
Band deviation ranges from 0.5σ to 3σ in 0.5σ steps (6 options)
In total 120 condition combinations will be backtested
Testing period is shortened to the last 5 years for a quick test (January 2019 to March 2024)
Next time, based on these results, we will verify the logic’s edge.