GoldenSOUTH

It's better to have no discretionary elements when operating with an EA

GoldenSOUTHisa method that determines trends based on the divergence rate of long-term and short-term moving averages on the hourly chart, and enters trades on lower timeframes.This is the basic approach.

Therefore, technical analysis is fundamental, but it is necessary to be cautious about indicators and other factors.

However, when operating the EA, if you have to be in front of the chart just because of indicators,"It's faster to do it discretionarily."I can't help but think that way.

Taking that into account, by adding restrictions to the logic to allow for as much unattended operation as possible, the need to manually stop the EA has been eliminated.

As I am also a discretionary trader, after installation,"I believe that not having discretion such as stopping operation during indicators or year-end and New Year is the essence of the EA,"so it is fundamentally designed for unattended operation.

Measures against major indicators

Even though there are restrictions in the logic, if the spread widens significantly during major indicators, the win rate will indeed drop significantly.

To address this, a spread filter is included.

Please set it to about 1.5 times the average spread of your broker. (Initial value: 8 pips)

For example, if the average spread during normal times is 3 pips, please set it to about 5 pips.

Trend-focused entries only during trend occurrences

The price movement of GOLD has become so volatile recently that it can easily break recent highs and lows on short timeframes. It has been difficult to determine whether a breakout on short timeframes is a false signal or a true breakout.

Therefore, by conducting environmental recognition on a larger hourly chart and making entries only on lower timeframes, the logic is structured to eliminate false signals as much as possible and only enter during solid trend occurrences.Environmental recognition on the hourly chart utilizes the "divergence rate of moving averages."The extent to which the long-term and short-term moving averages diverge is the main axis of this EA.

Additionally, once a certain price range is exceeded after entry, the trailing stop function is automatically activated. The stop loss is adjusted just below that point, and thereafter it trails at a certain distance. This strategy aims to chase the trend while ensuring that already gained profits are not lost.

As a result,the win rate is relatively high (about 65%) and allows for stress-free operation, but this is not without its drawbacks.

If a divergence occurs and the price rapidly returns after being determined as a trend by the indicator, the trend determination will remain until the divergence rate settles below a certain value. In such cases, the positions entered may be pulled close to the maximum stop loss,resulting in larger losses.While it can yield significant profits during trends, please be aware that there is a possibility of incurring substantial losses if the trend occurrence on the hourly chart turns out to be a false signal and disappears instantly.

I will explain this further using backtest data later.

Gradually increasing funds with a stable win rate

Many high win rate trend-based methods are martingale systems, and the rest are"methods that secure profits immediately after entry."GoldenSOUTH falls into the latter category, but it maintains a high win rate by only entering during trend determinations.

In other words, it only enters in the direction determined to be trending and trails to secure profits even with small reversals once the specified price range is met. If the trend determination continues, it will re-enter on the short timeframe. This process is repeated to steadily accumulate profits. You can confirm this by checking the red box in the previous image, where entries are made only in the trend direction.

As a result, the maximum number of consecutive wins is 15, while the maximum consecutive losses are 5, employing a strategy that minimizes losses by not targeting the early stages of trends.

Maximum drawdown over 10 years is below 10% of initial capital

When operating an EA, what you should be concerned about is what percentage the maximum drawdown is of the initial capital.

No matter how large the final amount is, if the maximum drawdown during the operation period exceeds the initial capital,"if that drawdown period occurs early in the operation, it could lead to total loss without mercy."This is a crucial aspect to consider when choosing an EA.

GoldenSOUTH has a maximum drawdown of $920 over a 10-year backtest period with an initial capital of $10,000,indicating that the drawdown has remained below 10% of the capital throughout the entire period.This shows that while there may be significant losses during rapid price fluctuations, the amount is below 10% of the capital, making it relatively safe to operate.

High recovery factor

Another feature of GoldenSOUTH is its high recovery factor.

The recovery factor refers to"the ability to recover after experiencing a drawdown."This is what it means.

EAs will inevitably experience drawdown periods.

However, if the recovery factor is high, the speed of capital recovery after a drawdown is fast, reducing the anxiety that makes one want to stop the operation.

GoldenSOUTHhas a recovery factor of 20.42, exceeding the standard for good EAs,"10 or more over 10 years."It also averages"1.53" annually.This is the case.

Profits by year

Over the past 10 years, GoldenSOUTH has only had a slight negative balance in 2017.

Since it does not enter trades unless there is a trend determination on the hourly chart, there may be months with zero entries. On the other hand, during the major market surge that began with the COVID crash in 2020, it was able to generate significant profits of nearly $3,000 (at 0.07 lots). By carefully assessing whether a slight trend behavior is a false signal or not, it can maintain a high win rate and reduce the psychological burden on users.

However, please understand that this EA is susceptible to market conditions, as seen in the trading history by year.

Regarding past stagnation periods

As mentioned earlier, GoldenSOUTH does not trade outside of trend periods. Therefore, there are times when capital does not increase at all until a trend occurs during past drawdown periods.

In the latter half of 2017, as shown in the image above, although the drawdown was small, it took 317 days to surpass the previous capital peak.

While it can respond to both crashes and surges, please recognize that if a range continues, similar situations may occur in the future, which is one of the risks.

About parameters

Regarding the parameters that can be set, since the logic is disclosed, considering the possibility of duplication,

only the following three will be allowed:

- Magic number

- Lot size

- Maximum allowable spread

Notes

⅛ Please set the allowable spread value according to your broker's settings. The initial value is 8 pips.

⅛ This EA does not guarantee future profits. Depending on future market conditions, losses greater than past tests may occur, so please understand.

⅛ Backtests are conducted with a fixed spread of 3.0 pips. Spreads above this may significantly worsen performance. Please check your broker's spread.

⅛ This EA does not have the function to automatically adjust currency pairs and timeframes. Please ensure it is set to the 1-hour chart of GOLD or XAUUSD of the broker you are using.