If you're looking to elevate your trading game, let me introduce you to IREA—a smart automated trading algorithm that takes advantage of market anomalies. The core idea behind IREA is simple: when a price shock occurs, it often leads to an inverse movement. This can be something you observe frequently in volatile markets.
IREA operates using the InverseReaction indicator (version 1.2), executing trades based on its signals. Essentially, when price fluctuations exceed a certain threshold, IREA takes action by trading in the opposite direction, leveraging those market shocks to your advantage.
Parameters to Consider
These parameters are tailored for trading the "EURUSD" on a daily timeframe and haven't been optimized yet. Feel free to tweak them based on the currency pair or time period you’re focusing on:
- Stop Loss: (default: 1000 points) This is the safety net for your trades.
- Take Profit: (default: 250 points) This is your profit target in points.
- Trade Volume: (default: 1.0) Sets the lot size for your trades.
- Acceptable Slippage: (default: 3 points) This is the allowable deviation from your desired entry price.
- Minimum Bar Size for Signal: (default: 300 points) This is the first filter for the EA, identifying minimum shock levels. It’s crucial this is set above the Take Profit level!
- Maximum Bar Size for Signal: (default: 2000 points) This helps distinguish between minor shocks and major market events like crashes or interventions. The EA is designed to focus on smaller shocks, so feel free to adjust this parameter.
- Confidence Coefficient: (default: Golden Ratio) This is an important parameter for the indicator and should only be altered if you know what you're doing. For more info, check out the indicators page.
- Moving Average Period: (default: 3) Another indicator parameter that should be changed with caution. More details can be found on the indicators page.
Test Results
Testing on EURUSD, D1, from 01.01.2012 to 01.08.2013, with a leverage of 1:100 and an initial deposit of 10,000 USD.
Pro Tips
- Ensure you have the 1.2 version of the InverseReaction indicator installed.
- Be cautious; the Inverse Reaction strategy can be quite unpredictable immediately after major economic events. Just look at the recent test results where a speech from the Fed had a significant impact!
It's best to avoid employing this strategy right after such news hits.
- This EA is primarily designed to demonstrate how the InverseReaction strategy can function in different trading conditions. However, it’s important to note that it’s not a polished or sophisticated EA, and as mentioned on the indicator's main page, the strategy performs much better when combined with other technical analysis tools. So, it’s advisable to steer clear of using this EA for real trading without proper conditions.
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