MT4 Forex News Indicator
Breakout trading strategy “Fractal Support & Resistance Breakout” is designed mainly for Forex and can be used on all currency pairs on any time-frame. Its rules state that:
A trader should place a buy order when price breaks through a resistance level. A sell order should be placed when price breaks through a support level. A stop loss should be placed at the opposite support/resistance level with 1:2 Risk-to-Reward ratio. Support and Resistance levels are based on Fractals indicator.
For our test, we have used a Trailing Stop which is launched after a trade has started and is modified each new 1 pip of profit. From our point of view, such approach allows to maximize profit and minimize drawdown. We have run the test for 2010.01.01-2019.06.26 using Control Points modelling on GBPJPY-H1, with 1:2 leverage, without reinvestment, assuming spread equals 10 ticks, with starting balance $10,000. These are the main parameters of financial performance, that may allow you to evaluate whether this strategy worth your attention or not:
|ROI||# of trades||Winning ratio||Max. drawdown|
The following charts may give some possible insights on which filters to apply (time sessions, day of week limitation, trend strength threshold, overbought/oversold conditions, volatility range) to turn this strategy profitable should you decide to use this strategy in your investment portfolio:
1. Despite “Fractal Support & Resistance Breakout” trading strategy being profitable, its drawdown is very large. During 2010-2019 testing period maximum drawdown has comprised 87.64% using leverage 1:2 when trading this strategy.
2. “Fractal Support & Resistance Breakout” trading strategy has produces 13.82% annualized ROI during 2010–2019 years using 1:2 leverage.
3. We have analysed data received from a test of “Fractal Support & Resistance Breakout” trading strategy during 2010–2019 years and applied some filters such as Stochastic filter and RSI filter. As a result, the profitability of the strategy has increased from 13.82% up to 18.57% and its drawdown has reduced from 87.64% to 21.04% using leverage 1:2. Reducing the drawdown has allowed us to increase the leverage up to 1:7, which in turn has resulted in annualized ROI increase up to 61.60%!
If you decide to buy an EA, coded in accordance with the strategy and used for the test, or to make any amendments to the original strategy rules – please, feel free to contact us.
Our company specializes on automated trading systems and trading indicators development for the most popular trading platforms, such as MetaTrader 4/5, NinjaTrader 7/8 and cTrader.
If you need your own automated trading software designed based on your individual requirements, make a request for a free consultation with our team of professional programmers and find out the cost and terms of your project development.
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MetaTrader 4/5 https://www.nordman-algorithms.com/metatrader-programming