How it Works
Trade Pilot FX is a hedged quantitative forex trading Robot for cTrader
The cTRader Robot implements a trend following strategy based on Fibonacci retracement / expansion levels, 25 major indicators, price action patterns and currency correlation. We also implemented our own optimization rules for your convenience.
Some of the indicators is been used:
Moving Average 1H, 4H, 1D. Periods 30, 50, 100, 200
Relative Strength Index
Average True Range
Direction Movement Index
..and many more
It is optimized to run on 1-hour timeframe, you may set it up and optimize it to run on other timeframes. The trend recognition is been confirmed in 4-hours and 1-day timeframes.
The strategy it is partially based on the Grid paradigm, however, with some fundamental modifications to reduce risk and maximize profit. While the original Grid system doubles the volume each time a hedged order is opened, we use a simple arithmetic sequence 1,2,3,4,5 as multiplier, X*n = vol, where n is the number of the hedged order:
0.1 Lots * 1 = 0.1 Lots = First order
0.1 Lots * 2 = 0.2 Lots = 1st hedged order
0.1 Lots * 3 = 0.3 Lots = 2nd hedged order
0.1 Lots * 4 = 0.4 Lots = 3rd hedged order
0.1 Lots * 5 = 0.5 Lots = 4th hedged order
Trade Pilot FX is been tested and optimized to run all 28 major forex assets simultaneously:
EUR/USD, EUR/GBP, EUR/JPY, EUR/CHF, EUR/AUD, EUR/CAD, EUR/NZD, GBP/USD,GBP/JPY, GBP/CHF, GBP/AUD, GBP/CAD, GBP/NZD, USD/JPY, USD/CHF, USD/CAD, CHF/JPY, CAD/CHF, CAD/JPY, NZD/CHF, NZD/CAD, NZD/JPY, NZD/USD, AUD/USD, AUD/JPY, AUD/CHF, AUD/NZD, AUD/CAD
Max assets (bundles of drive and hedged positions) simultaneously open: 8
Max assets containing same currency simultaneously open: 2
Show buy/sell score.
Minimum score to open buy or sell position.
Maximum score to open buy or sell position.
Min Score Diff:
The minimum difference between buy and sell score.
Show Fibonacci levels.
Prevent opening a position if price is as close as the distance in pips.
0% Level Price:
Start price of the Fibonacci retracement/expansion. To Work without Fibonacci, set value to 0.
100% Level Price
End price of the Fibonacci retracement/expansion. To Work without Fibonacci, set value to 0.
Turn on/off currency correlation check.
Number of pips to open hedged position.
Take profit of the drive position.
Stop Loss in pips.
Sticky Stop Loss:
Sets same SL price for all positions within a bundle.
Max Hedged Orders:
Maximum number of hedged order to open for one asset.
Pipstep * Max Hedged Order + Pipstep * 2 = Risk % of actual Equity
Max. Equity Drawdown:
Used to limit equity drawdown during optimization.
This cBot detects correlations of currencies and currency pairs. Assuming EURUSD and AUDUSD are positive correlated and EURUSD has already a losing BUY position open. If a BUY signal is detected for AUDUSD cBot won't open the position as long the positive correlated EURUSD losing. Viceversa for negative correlated currencies and currency pairs.
There is a free correlation indicator here: https://ctrader.com/algos/indicators/show/1691
When trend and volatility is detected, the system opens a drive order. If trend continues, drive order hits take profit and closes positively. If price goes to the opposite direction and after a predefined distance in pips (usually 30-50 pips), system opens the first hedge order. This is the Grid part of the strategy, however unlikely the Grid system that doubles the volume, we just increase volume by factor one and we limit the number of hedged orders to four.
If you prefer no hedging you can set hedging off. Set Max. Hedged Orders parameter to 0.
Be aware, the more hedged orders you open, the more equity drawdown is generated.
Trend Following Dilema
As long a trend is unbroken and volatility is high, one should keep trading the trend, therefore, keep winning position open or open new ones in the direction of the trend. This is the very fundamental rule of the trend following strategy. The key question is, when is the trend going to break. Another way to put this question is, when trend stops and reversers, is this really a trend reversal or just another price correction. This is the trend following dilemma.
It is your duty to find out if it is worth to keep hedging a position or close the whole bundle (drive order and hedge orders) because the trend is reversed. Fibonacci levels making this decision easier.
Because this robot uses Fibonacci Retracement / Expansion levels, optimization is obsolete. Nevertheless, we have build our own optimization rules for your convenience.
Parameters to optimize: Min Score, Max Score, Score Diff, Distance to Fibonacci Level, Pipstep, Take Profit
Optimization is a double-edged blade. On one hand it is necessary, on the other hand it may be overdone.
Over-Optimization leads to great results in backtest but poor performance in forward-tests and real-life environment. If you run optimization to find the perfect SMA period for a specific asset, and you run a range 50-150 by step 1, you will get very good backtest results, however the settings will perform poor in the future because they are to specific.
While you want to search the optimum parameters, you should keep parameters as universal as it gets. To find a good SMA value for a specific asset, use a range 50-150 by step 50. If you like to run optimization for smaller time-frames, you may use a range 10-50 by step 10.
Also, the period you are optimizing is very important. If you optimize the last 5 years, you will get very generic values which they will perform poor in the future. The same goes for a too tight period of 3-6 months. The perfect period to optimize is one year. To see how optimization impacts forward/real trading, optimize any asset for the period of 2018 and then run a forward-test from 2019 until now.
Along with Trade Pilot FX trading robot , we deliver a set of parameters for all 28 major assets. These sets of parameters are not too general and not too specific; therefore, they deliver good results in all periods.
While some assets deliver good performance because of high volatility, other deliver excellent or poor performance. The final profit it is not that important when it comes to optimization. One should look for as much trades as possible and the Equity Drawdown should not exceed 2%. Find below some examples: