The Overbought Oversold EA is a short term model that identifies key RSI strength and weakness along a short term range. Based on the specific time frame set, the Metatrader EA can identify when a range is set and the degree of variance in the overall strength or weakness at the time. For example if the forex cross is trading in a sideways range, it will set specific RSI levels based on the historical data. If these high or low points are touched, then the EA will trade accordingly. The default settings are set with no stop loss or take profit; however this could be extremely dangerous and could lead to significant drawdown periods. Outlined below are some of the unique and interesting features of the Expert Advisor.
Trainable / Ability to Optimize
Unlike many other EAs, the Overbought – Oversold system allows the user to optimize on different time periods. Caution should be taken, so as to ensure that it is not curve fitted. During the optimization, the trader can test different parameters and levels including take profit, stop loss points, different RSI ranges and trailing stops.
% Account Stop Loss
The EA provides the trader with a simple account percentage stop loss parameter. This will not show when the order is open, however when set it will calculate the percentage of loss the trade is at and determine (based on your account) the exit point. For example if you set it to 15, then a final level of exit is 15% loss of your total account value.
Trailing Stop Loss
Many Expert Advisors do not offer the opportunity to automatically set a trailing stop loss to lock in profits on the way up. This EA identifies how far in profit your trade is and will then set the level of trailing stop according to you original parameters. When optimizing or training the EA, you can decide on whether this should be activated.
Demo Account Performance
During the week of the 25th April, we tested the EA on a demo account at FX Pro. The system started the session on a positive note, however on Thursday a few losses added up and pushed the balance back to the original starting level. In order to effectively gauge the potential of the EA, we used two completely different sets of parameters.
First model: T/L =1000 S/L = 500 % Account Lose = 40%
Second model: T/L =790 S/L = 900 % Account Lose = 40%
The performance for both was mixed with a 50% win rate. The initial lot size was 10 and then it was manually increased to 20. Such settings were very high risk. Included below are the downloaded detailed statements from FX Pro to show the demo account performance. Please note this is on a demo account, not real. Caution should be taken with all EAs, as you could lose more than you put in.