This robot is loosely based on "GodBot". It works by determining trend direction on a higher time frame using DEMA, then trades pull backs determined by Bollinger Bands on a lower time frame.
It was returning some small gains in back tests, and then I decided to increase the stop loss, and it got better results yet. While not spectacular, the test was run on GBPUSD, which chews up a lot of my robots, and has an 87% accuracy rate and wins on average 8 times in a row.
(Back test on 5 minute GBPUSD chart from 1-1-2011 to 2-5-2012)
It hasn't yet had it's settings optimized. The downloadable version has the settings that this test was run on already plugged in.
A while ago I read something about management of stops and take profit levels, as well as money management, being much more important than any particular system. Looking over some of my charts, it looks fairly simple to make money, yet incorrect stop loss and take profit levels are eating up what should otherwise be good trades.
Hence the reason for increasing the stop loss with this robot.
Often when optimizing robots, results suggest stop loss settings much larger than the 30 pips or so I usually like to use. In the past, I used much larger stop losses, but the results were very random. Sometimes I would get lucky and trades would swing back in my direction, but I prefer to eliminate such swings if I could by using the smaller stop losses.
Looking at my charts and seeing the different scales the different currency pairs are in, I can see that 30 pips is nothing to some of them. So perhaps using large stop losses is better. Generally though this means I need to look for potentially bigger trades, which means using higher time frame charts, which means less potential trades and more waiting.
This particular robot seems quite accurate, so we can seemingly get away with making more trades on a lower time frame, but still use a larger stop loss.
