In the “Verification by backtesting" series, we verify the performance of free EAs registered in the MQL5 community from the backtesting results. We hope it will help you choose EA.
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The 21st installment is “CAP Adx Trader EA MT5“.
About “CAP Adx Trader EA MT5"
Adapted from official MQL5 page
CAP ADX Trader EA trades using the Average Directional Index (ADX) Indicator. It offers many customizable Average Directional Index (ADX) trading scenarios and flexible position management settings, plus many useful features like customizable trading sessions, a martingale and inverse martingale mode.
- Easy to use and customizable Average Directional Index (ADX) setting.
- Enable Grid trading.
- Customizable break-even, SL, TP and trailing-stop
- Works for ECN/Non-ECN brokers
- Implements a martingale features
- Customizable indicator settings
- Filter trading by forex sessions
- Built-in money management
- Built-in news filter. EA automatic download news data from news website.
The EA implements the following entry strategies, that can be enabled or disabled at will:
- Trade when first determines direction by ADX main value
- Trade +DI/-DI over each other generate Buy or Sell signal
- Trade +DI/-DI crossovers each other generate Buy or Sell signal
Four different trading behaviors are available in the EA inputs:
- Both Side (Long and Short): The EA will buy at ADX generate Buy signal and sell at bearish signals both trade
- Any Single Side: Open any one trade which signal come first (Buy or Sell)
- Long Side Only: The EA will buy at bullish signals and disregard bearish signals
- Short Side Only: The EA will sell at bearish signals and disregard bullish signals
Additionally, it implements four different money management modes:
- Trade manual lotsize: The EA will trade a fixed lotsize on each trade
- Auto-calculation of lotsizes: The EA will increase or decrease depend on account balance increase or decrease
- Martingale: The EA will double the lotsize after a losing trade
For a complete description of the input parameters of the EA, kindly read the user guide.
How to trade “CAP Adx Trader EA MT5"
Meaning of each line of the ADX (Average Directional Index) indicator
- D+: An indicator of the strength of the buying force
- D-: An indicator of the strength of the selling force
- ADX (Main): An indicator that shows the presence or absence and strength of the trend
1． ADX Filter Type First, you need to choose whether you want to trade when a trend occurs or trade in a flat.
- Trade On Trending Level – Trade when the main line of the ADX is above the ADX trend level. It means that a trend is currently occurring.
- Trade On Ranging Level – Trade when the main line of the ADX is below the ADX ranging level. It means that it is currently in a range.
2． ADX Entry Type After selecting the ADX filter type, you need to select how you want the EA to open buy and sell trades.
- D+ and D- Up & Down – If the D+ level is above the D-level, it is a buy signal, and if the D+ level is below the D-level, it is a sell signal.
- D+ and D- Cross – if the D+ level crosses above the D-level, it is a buy signal, and if the D+ level crosses below the D-level, it is a sell signal.
- No Entry Signal – Do not select an entry. If you select this option, the EA will open buy and sell trades based on the ADX filter type.
- This EA is a martingale type EA by default, but it can be made in detail such as the number of lots, trading time, grid settings (including whether or not to use), stop loss, take profit, etc., and depending on the settings, it will be a completely different type of EA.
⚡⚡⚡ Do You Want ADX EA With More Advanced Strategy?⚡⚡⚡
- It product has more then 34+ build in indicator that you can make more then 1 million combination strategy that boost you trading strategy with an incredible amount of functionality. So you can test your strategy easy way without knowledge of coding.
Although it is a paid version, an EA builder called CAP Strategy Builder EA MT5 has been released as a product of the same author. If you have your own trading strategy, you may want to consider it.
Examining the Stoploss Value
- If you do not set a stop loss, this EA shows a beautiful upward profit and loss curve. However, the initial setting (Averaging 1000 points) does not withstand long-term backtesting, resulting in a stepped profit and loss curve as shown in the figure below.
- Based on the preliminary test results, it seemed that “Trade On Trending Level" and the time frame “M30" were appropriate, so the stop loss value was examined at “EURUSD# M30, Trade On Trending Level".
The test conditions were NOZAX Zero Account (ECN), initial balance of $10,000, period January 1, 2013 ~ December 31, 2022, and the stop loss value was compared in 10 steps from Start=1000 to Stop=10000 and Step=1000.
- Under this condition, it seemed that if the stop loss value is greater than 2000, the stop loss will not be charged.
Screening of supported currency pairs
As usual, we backtested using MT5’s “function to test all Market Watch symbols". The test conditions were NOZAX Zero Account (ECN), Initial balance: $10,000, Period: January 1, 2013 – December 31, 2022, Timeframe: M30, Parameters: Trade On Trending Level, StopLoss: Averaging 2000 points.
- Compared Stocks: 21 Currency Pairs – AUDCAD#,AUDJPY#, AUDNZD#, AUDUSD#, CADJPY#, CADCHF#, CHFJPY#, EURAUD#, EURCHF#, EURGBP#, EURUSD#, GBPAUD#, GBPCAD#, GBPCHF#, GBPJPY#, GBPUSD#, NZDUSD#, USDCAD#, USDCHF#, USDJPY#
- As a result of the screening, it seemed that only EURUSD# and CADCHF# did not take a stop loss in this setup.
Robustness through long-term backtesting
To see how robust it is, we did 15 years of backtesting on EURUSD# and CADCHF#. However, at the averaging 2000 points of all currency pairs, the result was that they took a stop loss between 2008 and 2013.
So, I raised the stop loss value to 3000 points and was able to get through the CADCHF#.
The test results below are the results of Stop Loss Averaging 3000 points. During actual operation, it is necessary to look at the margin (remember that it is a martingale) and further increase the stop loss value.
- Account: NZX Zero (ECN) (NOZAX)
- Initial Balance: $10,000
- Currency Pair: CADCHF#
- Timeframe: M30
- Parameters: Trade On Trending Level, StopLoss: Averaging 3000 point
- Period: 1 January 2008 – 31 December 2022
In the settings we have introduced, unrealized losses have been relatively small, but profitability is not very high. Therefore, we want to balance the tolerance for unrealized losses with the trading volume to increase the number of lots. However, as I always say, there is a possibility that there is an accident with the nanpin martingale type EA, so please decide the number of lots with that in mind and check the behavior in the backtest.