EMA WMA RSI Advisor
The EMA WMA RSI Advisor is a fairly simple and at the same time effective development, which was
made publicly available in 2010. EMA WMA RSI is a fully automatic advisor that was created by a Russian trader enthusiast with the pseudonym Chimilion, who to this day pleases traders with his interesting developments on various Forex forums.
The EMA WMA RSI Advisor is a trend robot that works using simple indicators, namely moving averages and RSI .
It is worth noting that due to the technical foundation of the advisor's strategy, it can be used on any trading asset, however, it is worth considering that it was primarily developed for major currency pairs.
Setting EMA WMA RSI
There are different versions of advisors on the Internet, but if you look at the reviews on the forums, it turns out that only the first version is the most stable. EMA WMA RSI is designed to work in the Meta Trader 4 trading platform, so it must be installed first.
It is very important to update after installation. To do this, you can either restart the platform or in the navigator panel click update in the additional menu. Actually, after the update, the advisor will appear in the list, so to get started, just drag it onto the chart of any currency pair you need.
Strategy and Settings
The basic basis for entering a position is the intersection of the fast moving average with the slow one, and if this happens from bottom to top, the adviser buys, and if it sits from top to bottom, it sells. In order to reject false signals that arise in a sideways market, the RSI indicator has been introduced into the EA.
So, if the line of this oscillator is above the 50 level, the adviser will only buy, and if below, it will only sell.
If an expert has opened a deal, but a signal appears in the opposite direction, then EMA WMA RSI will not close the previous position, but will open a new one in addition to the signal. The principle of operation is clearly visible in the strategy tester when visualized:
If we talk about settings and optimization, even a person remote from automated trading can understand them.
Thus, in the period EMA line, the period of the slow moving average is indicated, and in the period WMA line, the period of the weighted fast moving average is specified. As we have already said, the EA has a filter, so you can set the RSI period in the settings.
The stop loss line specifies the value of the stop order in points, and the takeprofit line specifies the profit amount in points. The advisor also has two options for money management, namely trading with a fixed lot or depending on the risk percentage.
If you specify the position volume in the Lot line, the advisor will work with a static lot. To enable the so-called dynamic lot, which will grow as capital grows, in the risk line, indicate the risk percentage of the deposit.
In the Close Counter line, you can enable reverse, namely, if a signal appears in the market in the opposite direction, the expert will close the order and open a new one based on the signal. The Trailing Stop line indicates the trailing in points, and in the Tip Fr or Candl line you can change the type of trailing.
So if you enter 1 in the Fr or Candl line, then the trailing will be based on candles, and if 0, the trailing will be based on fractals.
Testing in the EMA WMA RSI strategy tester
The advisor was tested for the entire year 2015 with default settings. We chose a very small amount of $100 as the initial capital, and the test was carried out on the hourly chart of the Euro/Dollar currency pair. Test result:
As you can see in the chart, despite the fact that the expert is clearly outdated, and its system is from 2010, it was able to bring 24 percent of the deposit, but was on the verge of losing money due to a 50 percent drawdown.
Actually, this result inspires confidence, so we decided to optimize according to all basic parameters. The test result after optimization is shown below:
Literally the simplest optimization led to the fact that the advisor earned almost $200 with an initial capital of $100. However, it is worth mentioning a minus, namely, no matter how we optimized, the drawdown never fell below 30 percent.
In conclusion, I would like to note that thanks to simple trading tactics , which are focused on trend trading, the EMA WMA RSI advisor not only retained its profitability, but after simple optimization for a currency pair it is ready to bring quite high and stable profits.