Tell us please how trading stands in Japan. How is the whole trading industry developed in the your country?
I am Chinese but have lived in Japan for a long time. Normally Japanese brokers have large spreads and they only provide yen pairs for trading. No broker provides platforms that allow automated trading. Few people here use auto trading. So I turned to abroad brokers that have automated trading service, among which I found MetaTrader to be the best. I have been very happy with the MetaTrader 4 system.
So you now live in China. What about trading there?
In China, trading forex is against the law. But thousands of people here still trade on forex. However, only few people use automated trading. I think, sooner or later, the Chinese government will open the door to forex. Then more people will know system trading and MetaTrader 4.
Let’s talk about your Expert. What signals are used in it?
My Expert Advisor tries to catch the main trend of a day. It's based on the famous catfx50 strategy. Sometimes it will use Moving Average cross as the signal. The main indicator is StepMA. It will take 0, 1 or 2 trades a day normally, and has a StopLoss as small as 18 pips. If it wins, it makes 20-100 pips. The theory behind this expert is: "Many a pickle makes a muckle".
Judging by some losing positions, these signals do not always forecast the right direction. Are you satisfied with the behavior of your expert at the Championship?
I am satisfied with the behavior, but I think it still needs to be improved. No Expert Advisor can always forecast the right direction. If I can improve the win ratio a little more, I am sure it will give great return. I think the small StopLoss is a key to success.
Have you tested, optimized it before the Championship? What is your general opinion about Strategy Tester?
Because of the time limit, I didn't have much time to test and optimize my expert. I made it in one week, then backtested it for one week, then two weeks of forward tests. If there is Championship 2007, I am sure I will make a much better expert advisor. About the Strategy Tester in the newest MetaTrader 4 version, it really surprised me. In the most time it gives similar results as manual backtest. You did a great job!
You never place Take Profits. This means that you have your own mechanisms of closing profitable positions. Could you tell us more about them?
It's simple. Because my expert is a "day trader", it closes trades when Relative Strength Index is above a certain level and fails to make a new high.
So your Expert applies RSI. Do you have any other indicators in it?
No other indicators but some filters like daily range.
Why does your Expert Advisor always work with only 4 lots? Why not 3 or 5?
I should have set it to 5 lots but I forgot to do that. My expert has a very small drawdown, so it can trade more lots with money management. If I had more time I would have done that.
Please tell us more about your money management system.
I will do a backtest to get the possible maximal drawdown first. Then for example, base fund is $10000, trading 1 lot has a maximal drawdown of $3000, I will trade 1 lot until fund reaches $11000, then 1.1 lot until 12000. I will never decrease the lots.
Your expert opens only one position at a time. Is it a part of your strategy? Are not you afraid of getting behind those who open 2 or 3 positions at a time (Rich, for instance)?
Yes, I did think it about. Finally, I gave up to do so because I didn't want to gamble. I want to make a true Expert Advisor.
But what about prizes? Don’t you want to be awarded? Do you just want to show that your expert is serious?
If I have a successful expert, I can earn money easily. I do want to get the prize money, but I also don't want to be knocked out early.
You are in the third ten now. Do you think your Expert Advisor will make it into the top of the Championship?
It's very difficult for my expert to get top positions. There are trend experts and ranging experts. Also other good experts. Who will win, depends on the market. I think my expert will get a better position in a long term but not in 3 months.
Lots of luck for you in the Championship!