Heart Afire

With a hot heart and a cool head, we introduce EA "Heart Afire".

Guide

We provide various information about EA on our blog.

If you have any questions or concerns, please visit the following web page.

https://hannah-fx.com/

Added on 4/7/2019:.

Tetra mode has been implemented with multi-positioning and increased stability .

If the Multiposition Mode (Tetra Mode) at the bottom of the EA parameters is set to true, the EA will operate in Tetra Mode. The default setting is false.

Although there are more precautions than single position in terms of money management, the multi-position version is by far superior in its ability to respond to market conditions, so we recommend operating in the Tetra mode.

feature

logic

Designed with minimal optimization

There are various indicators in Forex, such as MACD, Stochastics, and Bollinger Bands.

However, the more parameters you increase when creating an EA, the more likely you are to over-optimize for past data, and the less likely you are to be able to respond to future market conditions.

Therefore, Heart Afire is designed to be extremely simple, referring only to multiple moving averages for entry.

In addition, since the decision is made when the opening price of the hourly leg is fixed, there is little difference in performance among brokers, and stable operations can be expected.

Efficient entry for both forward and reverse

When a long-term, strong trend occurs, the forward trend is used, and when short-term overbought or oversold signs are recognized, the reverse trend is initiated.

This is an example of a successful and accurate trade. While following the uptrend, the trader was able to detect a sudden buying trend and turned to a countertrend.

The profit-taking logic employs a trailing stop to pursue maximum profit.

The average number of trades per year is 264 times/year, which is calculated to be a little less than one entry per day. As a day trading EA, it trades relatively frequently and steadily accumulates profits.

Low-risk operation with limited stop-loss price

Heart Afire will basically cut its losses when the stop loss is reached, except in the case of a break-even purchase, in order to prevent overfitting as mentioned above.

However, the stop loss range is set internally between 30 and 55 pips at the time of entry, so losses per trade are limited.

In addition, the single-position design prevents large drawdowns and ensures that the trader can use the system with peace of mind. We do not use any risky methods such as "nan-pin" or "martingale," in which a single drawdown can be fatal.

In addition, to avoid political and economic events that may occur over the weekend, positions are not carried over to the following week, but are closed before the market closes.

demerit

Despite the above advantages, unfortunately, there are also drawbacks to this EA.

Not suitable for short-term and high-leverage operations

Heart Afire's profit/loss ratio (average profit divided by average loss) is 77.7% and its win rate is 63.7%. For every three trades, one will lose.

This is a measure to limit the maximum loss per transaction and to allow for long-term and high-value operations, but it may also result in losses on a monthly basis.

This EA is not suited for the kind of investment method where funds are multiplied several times in a short period of time by applying high leverage.

results

back-testing

We will show you the back-test results from January 2005 to September 2018.

simple-interest investment

This is the result when the spread is 1.0 pips and 1.0 lot (100,000 currency) is operated with simple interest. The chart shows a stable and steady upward trend. The net profit is 164,000$ in 13 years and 9 months against the initial margin requirement of 4,000$ (at 25x leverage), or approximately 41 times.

The profit factor (total profit divided by total loss) is a mediocre 1.36, while the maximum drawdown is limited to 5,200$. The Recovery Factor (Net Profit divided by Maximum Drawdown) is 31.5, with an annual average of 2.29, indicating that high profits can be expected with limited losses.

This is a chart of earnings by year and by month. 30% of the time, a monthly loss is recognized, but on an annual basis, a solid profit is secured.

In addition, Heart Afire's logic is calculated based on historical data through 2017, but has been performing well into 2018. This suggests that the EA's strategy could work well into the future.

compound interest operation

These are the results when compounded with a spread of 1.0 pips and 2x leverage. Although the leverage is kept moderate for realistic investment, we can still expect a 38x return in less than 14 years, or 1.30x per year.

The low relative drawdown of 14.3%, which is important when compounding, is also attractive.

forward test

The developer's own forward test from November 2018 is available: performance trends on OANDA Japan, NY v-20 server, 0.01 lot fixed.

We are running multiple EAs in the same account. Please visit myfxbook and check "Heart Afire" in the Custom Analysis > Magic tab on the upper right and click the Analyze button.

Parameter Item

List of parameter items used in Heart Afire.

Please be sure to check the number of lots, compound interest settings, and other items related to entry in particular, by back-testing before actual operation.

FAQ

Q1 : Are there any restrictions on brokers that can operate?

A1. Basically, this EA works with any MT4-compatible broker, but due to the logic of the EA, we recommend using GMT +2/+3 brokers. Brokers that use other standard time zones may cause discrepancies in entry and fail to perform as intended. Please refer to the web pages of the brokers for the standard time used.

Q2: Is there a recommended operation lot?

A2. Although it is difficult to make a general statement because investment amounts and investment stances vary from person to person, from the standpoint of risk management, we recommend setting lots based on the assumption of a maximum loss amount. The following is my own personal method of lot setting, and I would be very happy if it would be of help to you.

The maximum drawdown in the simple interest backtest of this EA is 5,213$ per 1.0 lot. Forward performance tends to be worse than in the backtest, and for simplicity's sake we will assume that a drawdown of 6,000$ per 1.0 lot is possible in the future.

Assuming a maximum allowable loss of 25%, or 250$, out of a fund of 1,000$ (about 110,000$ at current currency rates as of November 2018), the amount available for operation is 0.04 lots and 4x leverage, in light of the above drawdown.

Q3. there were entries and settlements that differed from the forward test.

A3. The EA's logic is designed in such a way that it is difficult to differentiate between brokers in terms of entries. However, since each broker has its own delivery charts, spreads, slippage, and other conditions, there are inevitably situations where differences in performance can occur. We ask for your understanding and patience.

You can see the results of this EA on the OANDA Japan NY server here. If the results are too different from your broker, please consider switching brokers.

Q4: Sometimes the market reverses in the direction of loss immediately after entry, and I can't find any advantage in the entry.

A4. We apologize for any concern this may cause. We will refrain from going into details as this is a fundamental logic issue, but this EA will make an entry when "there is a high likelihood that the market will move in a certain direction within a certain period of time from the current moment.

Therefore, temporary unrealized losses may occur, and losses may be incurred when the chart is affected by fundamental factors. We appreciate your understanding.

Q5: I would like to change the values of Take Profit, Stop Loss, Trailing Stop, etc. I would also like to add a function to limit entries by date and time.

A5. Thank you very much for your valuable feedback.

In this EA, the Take Profit and Stop Loss values are closely related to the logic from the initial design stage, so we believe that if they are changed after the fact, over-optimization to past data may occur, which could impair future performance.

In some cases, such as early morning scalping type EAs, it may be effective to limit the time and date of operation, but since this EA is designed to be effective 24 hours a day, 365 days a year, time restrictions lead to lost entry opportunities and thus lower expected gains. Therefore, the weekend filter is also initially set to false.

Therefore, we are sorry, but we do not plan to introduce any elements that will allow these changes at this time. Your feedback will be taken into consideration when we create future EAs.

We also have a blog with various other information about EA. Please take a look.

https://hannah-fx.com/