MMA_Breakout_strategy_Volume I - Encoded by WhooDoo22. - MetaTrader 4 Expert

MMA_Breakout_strategy_Volume I - Coded by WhooDoo22 (Multiple Moving Average Breakout Strategy Volume I).

Strategy description:

Currency pair: EUR/USD.

Time frame: M30.

(Be sure to run the EA during the period 2003.01.01-2012.06.01 and make sure to use "Only Open Prices" instead of running the strategy "Every Tick" in the Strategy Tester to speed up testing)

Strategy explained:

The strategy is based on the equation Resistance Over Support (R/S) and market theory trend changes (inclusive of smaller ranges) or combined level change movements (inclusive of smaller ranges).

Strategic goals:

Capture trends and range profits.

1. In order to obtain profits in a small range, EA uses small moving averages, such as EMA with a period of 5 and SMMA with a period of 25.

2. In order to capture big trend profits, EA uses larger moving averages, such as SMMA period 50 and SMMA period 200.

Strategy opening signal:

When SMMA period 1 is above/below SMMA period 200, a buy/sell order of 0.04 lots is opened.

Strategic closing signals:

Close buy/sell order of 0.01 lots SMMA period 1 crosses back to EMA below/above the slower moving averages 5, SMMA 25, SMMA 50 and SMMA 200.

(Part of the order closing function includes)

1. Big breakout = EMA 5 and SMMA 25 smaller moving averages are good signals for closing positions with big profits.

2. Strong trend = For the SMMA 50 and SMMA 200 larger moving averages, a good signal to close positions with profits.

Strategy Weaknesses:

1. False out = a bad signal to close an order, causing a small loss. Remember, multiple small losses can add up to large losses. Typically, in a consolidation, a moving average of 200 moving horizontally, where the moving average of 1 crosses above 200, then quickly moves back below 200, and then quickly moves back above 200 can send a bad signal to the EA. This type of market condition (combined price movement) can therefore be the worst nightmare for a moving average crossover of 1 and 200!

Reduce weakness to increase strength:

If you choose to improve this strategy and use it to further improve your MQL4 education, you can incorporate the following two updates.

1. Use the icustom indicator to draw multiple moving averages and adjust its moving average to the bars of a certain period in history (Example: The multiple moving average icustom indicator will calculate the last sixty bars and write its moving average as a "spear" across the range.)

2. Adjust the position closing function to make position closing more efficient. ( A. Sell order example. Sometimes when SMMA 1 crosses below SMMA 200, the slower moving averages 5, 25 and 50 are still above the 200 moving average. The problem is this: if SMMA 1 goes back above SMMA 200 only close 0.01 lots. This leaves 3/4 orders open. This should be fixed so that all orders (0.04 lots) are opened when SMMA 1 goes back to SMMA Close when above 200. The reason is to minimize losses. If the order is open at 0.03, it means more losses (little possibility of profit) B. Incorporate a combined price movement filter to eliminate "bad signals" of integrated price movements. (Consider coding the EA to "wait" for breakouts during integrated price movements, since breakouts are the advantage of this strategy)

Me and the MQL4 community.

Attachment download

📎 MMA_Breakout_strategy_Volume_I_-_coded_by_WhooDoo22.mq4 (18.18 KB)

Source: MQL5 #10848