Leveraging Regression Analysis for Collaborative Trading (EA Included)
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Hey everyone!
I'm excited to start this thread and share a trading ideology and EA that I believe can benefit everyone. But before we dive in, let me introduce myself. My name is Philip Pankaj, and you can find me on LinkedIn. I've spent nearly 10 years in trading, working with various algorithms. Professionally, I'm a fintech enthusiast and a data whisperer, with experience as a data scientist and data engineer at multiple institutions. Recently, I decided to develop a trading EA with a simple quant model so that everyone can participate in building it.
In AI and ML, one of the most basic algorithms is the regression algorithm. The fundamental formula for this algorithm is the line formula , which is also basic to neural networks.
To give you an idea of how regression works with price data, let's dive into the basics. Regression analysis helps us identify the relationship between variables—in this case, time and price. By plotting historical price data on a chart, we can fit a regression line that best represents the trend. The equation y = mx + b allows us to predict future prices based on past data. The slope m indicates the trend direction, while the intercept b represents the starting point of the trend line.
Here are the core principles of the EA:
1. Accept losses at a negotiated price.
2. Let the market decide take profit and stop loss.
3. Make an entry in undervalued "buy" / overvalued "sell" zones.
4. Be patient until taking profit or even when the market turns against us.
Buy: When the price goes below the lower band, we will buy, and when it crosses the regression line, we will exit the buy.
Sell: When the price goes above the upper band, we will sell, and when it crosses the regression line from above, we will exit the sell.
Additionally, we have a time filter and deviation features to optimize based on the underlying asset. This is a versatile trading EA that seems simple yet powerful, and I believe there is room for improvement.
I have attached the presets and the EA below..
EURUSD H1:
GBPUSD H1:
AUDUSD H1:
NZDUSD H1:
USDCAD H1:
USDJPY:
Please feel free to share your ideas and feedback below in the thread—I'm eager to hear from you. Your input can help shape the future development of this EA, and I'll be glad to incorporate your ideas and post the updated version right here. If anyone is looking to collaborate or needs assistance, don't hesitate to reach out to me on MQL5 or LinkedIn. Let's work together to refine and enhance this tool for everyone's benefit!Happy Trading!!
LinkedIn: Philip Pankaj