Hello Thomas. You have a degree in technical analysis. Could you tell us where and how you studied technical analysis?
I studied technical analysis two years after I had lost my money. I tried to understand why everything Stockletter recommended lost ground. The third year was the beginning of a long journey. The journey took me through all kind of methods to understand what was going on. And since then I have never used any market letter. My experience got me to the point where I thought it might be good to have a degree, and I took it at the German branch of the Technical Analysts Association called VTAD (Vereinigung Technischer Analysten Deutschlands – Technical Analysts Association of Germany). I always had to order books in the United States and study them in English. Since 2000, more and more books are translated and written about technical analysis in Germany.

Working at Der Zyklus-Analyst, you forecast on basis of cyclical analyses. What analytical tools do you use for this?
Well, this is no computer science method. I use Stan Ehrlich’s Cycle Finder. It is a tool that you put on a print and mark the cycle points. Then you do a forecast in the future. The best forecast ever was the low on 09/20/2001 in Germany DAX in early August of the same year. Cycles and charts told me that something big would happen and I wrote that we would see a drop of more than 1400 points. Reality told me later why this low was so big.

What is your forecasting efficiency? In other words, what part of your forecasts turns to be true?
The whole part turned out to take place and we saw a low just one day before my forecast. Germany DAX lost more than my forecast had told me before. We saw a high at 5100 and a low nearly 1800 points lower. This picture told at that time that we would see a double cycle bottom.

I’m sure many would be interested in knowing more about your Expert Advisor. It is developed on the basis of your own indicator, which is, in its turn, your know-how. However, Thomas, would it be possible for you to reveal some principles of how it works?
Well, it is my first step into this field and I have just begun. My indicator, "Bullbreath", just counts how many bars out of the last 10 bars end positively. If there are more than 8 counted, then there should be a top somewhere near. Otherwise, if this indicator is near zero to three then a bottom is near. The Expert Advisor works fine, but there must be other rules implemented because the markets are more chaotic. So I still have to search in a lot at charts and different timeframes in order to see where it works and where it does not. I think there is more time to test before me than behind. Right now, I’m using this indicator in my daily blog about the euro to get a feeling when the time is right. Then I look what other indicators I should incorporate.

Thomas, as you know, Championship 2006 is already behind us. What do you think of it?
It was a great event because everybody knew in the end at what level his or her Expert Advisor stood. When someone develops an Expert Advisor, he or she doesn’t know whether it will be a good one or not. System developers who have something good could become famous and get in where only people from the universities with degrees get in easily. This is the case in Germany. Nobody will take your expertise without a degree...

The previous Championship was organized great by people from MetaQuotes Software. The level this year should be far higher than last year due to the internet where a lot of good stuff is free available in MQL4 Community, so everybody can learn from other developers.

Did you find anything interesting and useful for development of BullBreathe in the last Championship?
No, since I had no programming skills at that time. It takes a lot more than only one indicator. And a lot more expertise in programming. Before this could happen, I really had to find the best timeframe, stop level, etc. First prior to go live with an Expert Advisor.

Click to enlarge

Ok, Thomas. We hope you will still find many interesting things on the websites of Automated Trading Championship 2006 and 2007. Let’s discuss the Participants of the previous Championship. Who did you like best? Why?
I liked VGC´s Advisor, as it had used Envelopes and ATR-Channel for signals. I am doing similar things with Envelopes and it generates a lower frequency of trading with high profit potential. The VGC’s profit factor is the highest but for the Winners’ Experts.

If you were able to give a special prize to some of the last year’s Participants (apart from the Winners), whom would you give it to?
I think Payday because he tried to trade 5 lots and got only 1 lot traded because of an error in the code. He was in the plus area and, if his Expert Advisor had traded with 5 lots, he could be the Winner.

Well, you will have this opportunity this year! Thomas, the Automated Trading Championship 2006 is in the past, so you could estimate the efficiency of various trading strategies. Can you describe how a profitable Expert Advisor should look like, in your opinion?
It should find out where to set a Stop Loss when a trade begins what is just marginally adjusted, and tell when a trend is exhausted by looking at the ADX maybe and get out. When a small downtrend or sideways trend accurse, it should get in the old direction when the ADX tells that this new move is again at the end.

Thank you for your interesting interview, Thomas.