iProfit HFT Detailed Trading Strategy
iProfit HFT is a trading system designed to profit from most market conditions. The startegy has been designed and followed by a professional day trader. PhiBase Technologies has implemented this strategy as a fast learning neural network since it involves dynamic adaptation to the most price movements seen within the previous 4 to 48 hours. The strategy also involves decision making based on prior data which is considered by many as an art rather an exact science.
iProfit NN model does not contain hard set rules, indicators or hard set formulas. The EA attempts to trade the normal price movements seen within a H1 bar - The NN model only predicts the upper/lower price for the new H1 bar. Prediction is based on a recursive training algo which has a reasonably good accuracy of +/- 5 pips over 65%. While this is an important part of the strategy, the core would be the decision making model which mimics the mind of the day trader. While the High/Low is made available for each bar, the buy/sell/ignore decision is based on price action and probability of success. multiple moving average cross over, support/resistance and stochastics are used to present the current market situation. The moving averages period is dynamically adjusted between 4 to 20 to meet the strategy requirement. The strategy is flow charted in the following diagram for better understanding of entry/exit.
iProfit is an ultra short term strategy, but trades on H1 time frame (every tick). This need not be classified as a scalper. The system has a success rate of 65% average gain size : 21 pip and average loss size is 31 pips. We recommend broker accounts with lowest possible spreads on all the traded pairs. iProfit strategy is not to out smart the markets. The EA trading style keeps generating small gains while keeping losses low - the trading volume gradually add up to net profits. iProfit aims to bring in monthly gains consistently, however there have been losing month (s) in the past and must be expected in future also.
A chart with typical trades is presented below. The EA HUD (chart messages) will indicate the current price action status from the EA's point of view. Advance trade entry notification will be displayed along with entry price when Bullish/Bearish conditions are present. Entry price is made spread independent by the trigger price being calculated as average of Ask and Bid. This reduces trade differences between accounts with different spreads. However, trade trigger will only happen if the price touches/crosses the entry/exit price. Broker feed difference of about 1 pip would be common and this may lead to entry time difference/no entry in some cases. iProfit is a frequent trader and averages about 100 trades. Trade differences between account (if any) would be smoothened out with in a short period of time.
It is highly recommended to run the EA on ECN accounts with lowest possible spreads available with the broker. It would be preferred to have zero/minimum spreads with commissions being paid outside of the trade. We recommend IC Markets True ECN or Sensus Capital C Feed accounts.
iPRofit strategy is very robust and can be used to trade multiple currency pairs. The EA is recommended for trading on EURUSD, AUDUSD, XAUUSD, EURJPY and GBPUSD.
iProfit HTF trades when bullish/bearish trends are present. Ranging/indecisive price action is considered as unsuitable trading condition. Multiple currency pairs provide the EA with good number of trading opportunity. The Low/Medium/Negative correlated pairs also help in reducing the drawdown of the portfolio at any given time. The following chart shows H1 price action for the five traded pairs and EA's trades on each chart during same time period.
From the above charts it can bee seen that even pairs which have very high (postive/negative) correlation like EURUSD and AUDUSD can have different trade entry. Entries may correlate at certain times based on strength of signals.
iProfit HTF trades all the pairs identically. There are no external optimization or parameter changes involved at any stage.
The NN model suggests trade entries with success probability greater than 75%. the EA uses the stoploss provided by the NN model to close trades which have gone in wrong direction. This stoploss level is calculated as per nearest support/resistance at the time of trade entry.
All iProfit trades are closed on Friday around US Close to prevent trades carry over into the weekend. Since iProfit is based on very short duration analysis, carry over of trades would not be recommended. The EA will close trades as per the day and time set in the parameters. The defaults used are Day 5 and Hour 19. This will vary as per your broker GMT offset time - The day/time will need to be set to one hour before last H1 bar of the week. While setting the exact time is not critical, having uniform close time will provide for better cross referencing the trades. Details about setting up closing time is described in the EA parameter section of this manual.