Optimizing True Direction Oscillator (Part Two)
Trading Systems

Optimizing True Direction Oscillator (Part Two)

15 August 2019, 15:10
Muhammad Elbermawi
Muhammad Elbermawi
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Optimizing True Direction Oscillator (Part Two)

Hello TDO community,
In my previous blog I showed you how to:

  • Optimize Indicator Parameters.
  • Optimize your Risk Return Ratio or RRR.
  • Optimize Lot Size.
You can read the previous blog from here:
https://www.mql5.com/en/blogs/post/728811
We did a great job until that and I hope that you followed the steps and did your own homework by optimizing other pairs that you trade. In this short blog I want to show you another feature found in "Bermaui Average EA" that can limit your risk. This is the " Maximum Number of trades" Parameter found in the Money Management section of the Expert.

 

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Most of you might think that because this EA use averaging method then it is dangerous, because it might keep averaging until it blows up the account. But it reality you can limit this danger by decreasing the number of levels or trades that you take when price moves against you. If your parameters are optimized good (like how we did in previous blog) then it will be wise to decrease the number of maximum trades that you take after the first one to a figure that produce a low draw down. Now let us setup our MT4 optimizer as follow:

  • Currency Pair: AUDUSD
  • Time-Frame: 4 hours.
  • Test Period: 1 year (August 2018 to August 2019)
  • Balance: 1000$
  • Parameter to test: Maximum Number of Trades (First = 1 Steps = 1 Stop = 30)
  • Test Mode: Every Tick

Attention Please

Before we resume our test, it is important to say that we will use the best value for the indicator parameter "First TDO Period". Our take profit will be 1000 and out "Order Steps" will be 100 as we got from the previous test that we did in previous blog. This is very important to make sure that those series of tests complete each other. The next picture shows the optimization start, end and steps.

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After the test is done the Optimization Graph looked like this:

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If we look at the optimization graph we can see that:

  • All tests were profitable, even those done with just one trade as "Maximum Number of Trades". This means that profitability is related to finding the best parameters in the previous steps that I explained in my previous blog.
  • Profitability increase when the "Maximum Number of Trades" increase, but after it reach to the highest limits it will stop increasing and stay stable.
  • As you can see in the next table, the draw down increase as we increase the "Maximum Number of Trades". It was at its lowest value when we test this parameter on one or two. It reached its highest level when we test it on nine or ten, then it stayed stable for the rest of the test. Because ten was the highest number that we reached in reality. So, any test done after it was not important.

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Conclusion

Decreasing the "Maximum Number of Trades" will decrease Bermaui Average EA Draw Down and profits, but it will keep the EA generating profits if all other parameters is well optimized.

I hope you like the blog and all trick. I think you will get the ideas. Good luck for everyone and have a nice profit with Bermaui TDO.

Muhammad Al Bermaui, CMT

#Bermaui