First, let me do some remarks about this new EA of a series of three.SERIOUS WARNING
Most Forex traders lose all their money.
Using the robot posted here in trading Forex does not guarantee success.
Trading this robot could lead to serious financial loss.
Trading this robot without understanding its underlying trading strategies guarantees traders will lose their money.
This is not a set-and-forget ea; there is no such thing and anyone who tries to claim there is, is either stupid or lying. This ea requires frequent manual intervention.
At best, a trading robot is only 90% as good as the manual strategy it trades. At best. At worst, it can be much less effective. If the strategy is rubbish, so is the robot.
To trade this robot, you have to understand:
How to use EA's and the risk involved in Forex Trading
When I programmed the Forex Duck I wanted an EA without indicators, only pure price action and market force measuring.
For the ForexAntiFragility EA I thought about a simple indicator that were a reflection of the mood of the market.
But for this first EA of this thread I want to apply some concepts from the decision theory, mainly from the decision trees. There have been some nobel sociologists that have wrote about this theory, and some applications in trading as you can see in the following document (see decision trees mainly).
Imagine an EA that conforms its decisions from several crossroads: one, decide if it will trade or not. Second, if yes, it will trade long or short.Third, If long or short, when to enter. Fourth, if the entry has been good (or bad) when to reentry or exit. Fifth, if the EA decides to reentry, at what distance of the first entry, etc.
As you can see things are going more and more complicated in a single pair EA. If you take a multipair EA this problem is still Harder due to the correlation, common profits and losses, etc.
Let's begin. For this first EA I have taken into consideration the works of Kahneman ("Thinking fast and slow"), Taleb ("On Forecasting", "Fat Tails, Asymetric Knowledge and Decision Making") and Gigerenzer ("Risk Savvy: How to make good decisions").
Here we go. This is the first of three EAs: Forex SantaMaria. The second will be LaNiña, and the third LaPinta. Why these names ? In honour of Christobal Columbus.
I have not tested this EA yet. Would you be the first? Try and let me know.
Regards
José Luis