Hey there, fellow traders! Today, I want to dive into a fascinating Expert Advisor (EA) called Backbone, designed for MetaTrader 4. This EA operates on the principle of adjusting trade directions based on TakeProfit, StopLoss, and TrailingStop levels. Rather than relying on complex indicators or mathematical models, it focuses on the idea that profitable trades generally last longer than losing ones.
Backbone is versatile and can be used across different timeframes, but keep in mind that the optimal settings for TakeProfit, StopLoss, and TrailingStop will vary between them. For instance, I ran some tests on EURUSD using the H1 timeframe, specifically optimizing between October 1, 2007, and September 30, 2008. To speed things up, I configured it to make trading decisions only at the opening of a new bar and used the "Open Prices only" option during optimization. The results were checked using the "Every tick" method, which provides the most accurate assessment.
Here are the input parameters I found optimal for the EURUSD H1 during the specified period:
- MaxRisk: 0.5 – This is the maximum risk for all trades at any given time.
- ntmax: 10 – The maximum number of trades allowed in one direction.
- TakeProfit: 170 – The target profit level.
- StopLoss: 40 – Set to 0 to disable; >0 to enable.
- TrailingStop: 300 – Again, set to 0 to disable; >0 to enable (remember, StopLoss must also be enabled).
Like most optimized EAs, Backbone performs best within the range it was optimized for. If you venture into "out-of-sample" testing, you might not see the same results. For instance, if Backbone participated in the 2008 championship, its balance would have been $104. However, don’t let that deter you! Backbone can serve as a solid foundation for creating more complex and profitable EAs by adding various filters to minimize losses.
My advice? Start by optimizing Backbone for TakeProfit, StopLoss, and TrailingStop using MetaTrader's built-in optimizer. Once you’ve locked in those optimized settings, you can then add filters and focus on optimizing just their parameters.
Best of luck with your trading adventures!
| Symbol | EURUSD (Euro vs US Dollar) | ||||
| Period | 1 Hour (H1) 2007.10.01 00:00 - 2008.09.29 23:00 (2007.10.01 - 2008.09.30) | ||||
| Model | Every tick (the most precise method based on all available least timeframes) | ||||
| Parameters | MaxRisk=0.5; ntmax=10; TakeProfit=170; StopLoss=40; TrailingStop=300; | ||||
| Bars in test | 7086 | Ticks modelled | 3103036 | Modelling quality | n/a |
| Mismatched charts errors | 219 | ||||
| Initial deposit | 10,000.00 | ||||
| Total net profit | 9,882,406.34 | Gross profit | 31,810,499.95 | Gross loss | -21,928,093.61 |
| Profit factor | 1.45 | Expected payoff | 4,607.18 | ||
| Absolute drawdown | 672.94 | Maximal drawdown | 2,039,240.00 (20.33%) | Relative drawdown | 82.13% (1,922,003.87) |
| Total trades | 2,145 | Short positions (won %) | 1,138 (26.27%) | Long positions (won %) | 1,007 (31.28%) |
| Profit trades (% of total) | 614 (28.62%) | Loss trades (% of total) | 1,531 (71.38%) | ||
| Largest | profit trade | 85,560.00 | loss trade | -23,220.00 | |
| Average | profit trade | 51,808.63 | loss trade | -14,322.73 | |
| Maximum | consecutive wins (profit in money) | 22 (1,861,260.00) | consecutive losses (loss in money) | 79 (-1,591,660.00) | |
| Maximal | consecutive profit (count of wins) | 1,861,260.00 (22) | consecutive loss (count of losses) | -1,591,660.00 (79) | |
| Average | consecutive wins | 7 | consecutive losses | 16 | |
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