FreeMan Advisor - the embodiment of the indicator strategy
Many traders on various Forex forums constantly discuss the effectiveness of standard
indicators, and in most cases everyone agrees that they are ineffective.
In fact, this thought has crept into almost every trader who uses technical analysis.
That is why from year to year we can see the emergence of more and more new technical analysis tools.
Actually, the race for the Grail is not new, but in practice it becomes clear that future profit does not depend on the indicator, but on who uses it.
The process of signal appearance is simple: when the RSI indicator with different periods is in the overbought zone, and the moving average with its slope indicates a downward trend - the adviser is selling. If the lines of the RSI indicators are in the oversold zone and the moving average with its slope indicates an upward trend, the advisor buys.
Installing FreeMan
FreeMan is a proprietary development that is distributed completely free of charge and written for trading in the MT4 trading terminal . Therefore, in order to use the Expert Advisor and test it, you need to perform a preliminary installation. To do this, enter the MT4 data directory through the file menu and drop the advisor into a folder called Expert.
After updating the installed components, the advisor is ready for work and testing. FreeMan uses a universal trading strategy that works on any currency pair, but the author himself recommends using the expert on a fifteen-minute chart of the GBP/USD currency pair. For an expert to start trading, you need to drag it onto the chart of a currency pair:
FreeMan Settings
The author of the expert has fully included all the necessary and unnecessary settings in the advisor, so this section will be very important for inexperienced traders. So, by default, the advisor calculates the lot automatically, so you can enable a static lot in the FixetLot line, and specify its size in the Lot line.
The Maximum Risk line specifies the maximum permissible risk per position in percentage. In the Trailing block you can enable trailing stop , in which case the trailing size is indicated in the TrailingStop line, and the trailing step is indicated in the Trailing Step line.
Also in this block, in the MinProfit line, the minimum profit in points is set after which the adviser will begin trailing the position. The most important settings block is RSI Teacher. So in the lines RSI Period and RSI Period2 the period of the indicator is set in two different versions.
The lines RSI Level Buy/SELL 1, 2 indicate the level on the RSI indicator from which a purchase or sale will occur. You can also enable the moving average trend filter in the Trend Filter line. However, in this case it is necessary to set the moving period in the MAFilter line.
Backtesting the Expert Advisor
The first test was carried out on the euro/dollar currency pair on a fifteen-minute chart with default settings. The initial deposit is $300, and the testing period is from January 1, 2015 to March 10, 2016. The result is below:
Over such a long period, the advisor opened only 2 transactions and we can say that the profit remained at the level of the initial balance. That’s why we are optimizing the expert using the RSI Period and RSI Period2 settings, as well as MAFilter. The optimization result is shown below:
The second test was carried out on the pound/dollar currency pair on a fifteen-minute chart with default settings. The initial deposit is $300, and the testing period is from January 1, 2015 to March 10, 2016. The result is below:
As in the first option, the advisor was able to open only 3 transactions, and closed two of them with a loss. Therefore, we optimize the Expert Advisor using the same parameters as above. Optimization result:
Summarizing the results, we can conclude that the FreeMan advisor is suitable only for the most patient and conservative investors, since the number of transactions after optimization, which was 10, will make even the most patient trader bored.