Ultimate Trading Course - High Quality Systems - Level1
Best Reversal Trading Expert Advisor - Level1 EA
The Level1 EA is part of the Ultimate Trading Coaching Program
In this article I will explain the usage of one of the best semi-automatic Expert Advisors for reversal trading that I know. With the help of this Expert Advisor you can trade successfully besides your normal day job, even if the average duration of the trade is only a few hours.
If you are an experienced trader, then you already know, that a consistently profitable fully automated Expert Advisor does NOT exist! If you are a novice trader, who didn't know this until now, then I'm sorry that I destroyed your dream of making easy money with trading without knowing anything about trading. On the other hand, I have probably saved you a lot of time AND money, if you stop searching for the golden goose which delivers you golden eggs for free.
But with a little bit of daily effort and appropriate trading knowledge, successful semi-automatic trading besides your normal day job is possible. After you have finished this article you have learned how to enter trades at extremely cheap prices and that this professional trading approach can be achieved with only a few Minutes of work per day.
In the following screenshot you can see my trading results verified by the neutral third party company myfxbook.
How you can achieve these great trading results too?
The secret to my trading success is entering my trades at cheapest prices. Because those trades nearly never fail!
In all liquid markets like the forex market, and major commodities, as well as stock indices, there are special price movements which I call "Mini-Bubbles" and "Mini-Crashes".
Such extreme price moves, which can occur to the upside and to the downside, are unsustainable! And the keyword here is "unsustainable"! Such extreme price moves can't last forever.
The unsustainable strong price moves are usually followed by a strong reversal of the price action into the opposite direction. And this move into the opposite direction is the highest probability profit move, on which you want to participate with your trades!
The price action looks exactly as a stock market bubble or the famous tulip bubble on the price chart. But they are much more short-lived. They last only days or a few weeks.
Because of the relatively short time span, I call them Mini-Bubbles and Mini-Crashes.
Mini-Bubbles and Mini-Crashed occur multiple times per month! And this means that you have multiple highest probability trading chances per month!
The Level1 EA is designed to accumulate a sell position with "limit order style" at the end of a Mini-Bubble and Mini-Crash.
In the following sketch you can see an example of a Mini-Bubble where the Level1 EA opens 3 sell orders at the anticipated end of the bubble. During the end of the bubble you will see an unsustainable steep upward trend.
The red arrow in the following sketch shows you the anticipated collapse of the bubble. This collapse is the reversal move that brings our orders into the profit zone. This is the reversal move during which the Level1 EA will exit the orders in profit.
The Level1 EA does the same procedure but into the opposite direction during Mini-Crashes.
At the end of a Mini-Crash you will see an unsustainable steep downward trend. That is the area where the Level1 EA will open buy orders.
The trend reversal move to the upside, which is also called "recovery move", is used to bring our buy orders into the profit zone. Within this profit zone the Level1 EA will take profit by exiting the buy orders.
Real-life Example How To Exploit A Mini-Bubble With The Level1 EA
In the following chart you can see real-life example of a Mini-Bubble. The bubble begins when the price leaves the steep trend channel of the upward trend to the upside.
This price move is also called a "trend channel overshoot". Outside of a steep upward trend channel the price has already started an unsustainable strong price move. Or with other words, the mini-bubble has started.
After the bubble started, a new smaller trend channel formed in our example. If the new smaller trend channel also sees an overshoot to the upside then you can be highly convinced that the bubble is over.
This last price move, which is even steeper than the price moves beforehand, tells you that the bubble is ready to collapse and that you can enter a sell position at the absolute best prices.
With the Level1 EA you can catch the end of the bubble in an automated way, even while you are sleeping or while you at your work place.
As soon as you see the smaller trend channel develop, you can then draw a trend line in your MT4 chart by connecting the highs of the the smaller trend channel.
You can then move this trend line a little bit to the right side, so that the right point of your trend line is in the future.
You can also move the trend line slightly upward so that you can be assured, that a really strong trend channel overshoot occurred, before the price reaches the trend line.
After that, all you have to do is to name this trend line "es". "es" means "entry short". Now the Level1 EA knows what to do. It will watch the chart for you and make a fully automatic entry while you can do other things, like sleeping or working.
As soon the the price reaches the trend line, the Level1 EA will open the first partly sell order according to your configuration.
In the following screenshot you can see the yellow and green area which immediately appear after you named the line "es".
The yellow area is the area where the Level1 EA will make the sell entries. The green area is the take profit zone where the trade will be closed in proft.
In the following screenshot you can see, that the price moved upwards and touched the trend line. The Level1 EA immediately opened the first sell position and placed a target price. You can also see small black lines above the first sell order. The black lines indicate the price levels where further sell orders will be opened according to the settings of the Level1 EA.
In the next screenshot you can see, that a second sell order was triggered, because the price moved further upward and touched the next small black line. The target price for both opened orders was adjusted and is now nearer to the current price. The target price has always the configured distance from the last entered order.
In the next screenshot that the direction of the trend reversed and that the anticipated strong downward move occurred. The target price was reached and both orders were closed in profit.
Real-life Example How To Exploit A Mini-Crash With The Level1 EA
We will now examine a real-life example of a Mini-Crash and how it can be traded with the Level1 EA.
The Mini-Crash started in the moment, when the price overshoot the descending trend channel to the downside, as labeled in the following screenshot.
The subsequent price action formed smaller trend channel which was even completely outside of the first trend channel. Even the second trend channel saw an overshoot to the downside, which is our final criteria to detect a picture perfect signal for the end of a Mini-Crash. This overshoot of the second channel gives you a very strong conviction, that the unsustainable steep downward trend is now in the final phase, before the price will shoot upward again.
To trade this Mini-Crash in an automated way with the Level1 EA, you need to draw a trend line which connects the lows of the second trend channel.
Then you need move the trend line to the right side, so that the right point is lying in the future.
This time you need to name the trend line "el". "el" stands for entry long. The Level1 EA will now know what to do when the price moves below the trend line.
In the following screenshot you can see the yellow area where the Level1 EA will enter buy orders. The green area is the profit zone where the EA will place the target price.
In the next screenshot you can see, that the first buy order was triggered. Further small black lines are placed below of the first order, where the EA would open further buy positions, if needed. The target price is automatically set to the configured distance, which you can adjust in the settings of the EA.
In the next screenshot you can see that the target price was reached very fast. The trade is now over and you booked a profit with the Level1 EA.
Of course, with visual judgement of the chart situation you can optimize the profits. In our example the profit taking came very early. An experienced trader would have let the trade running further upward, before taking profits.
The Level1 EA can optimize the profits too, in an partly automated way, as you will see next.
How to Optimize The Profits With The Level1 EA
In this example I want to introduce an additional feature of the Level1 EA, which gives you the possibility to enter at an even more selective price level.
Let's say that the steep and matured downward trend in the following screenshot would define a valid Mini-Crash, IF we see a trend channel overshoot to the downside. The maturity and steepness of the trend channel makes a second trend channel less relevant for a valid Mini-Crash signal.
In addition, let's say that there is major support price level directly below of the trend channel, BEFORE the trend channel overshoot occurred.
As you learned from the previous example, you need to draw a trend line and name it "el" to tell the Level1 EA that it must enter a buy trade, as soon as the price touches the trend line.
As in the examples before, the yellow area, where the EA will open the buy orders, starts directly at the trend line.
But your technical analysis of the situation shows, that a major support level is directly below of the trend channel. Therefore, you decided that you only want to enter the buy trade, if the trend channel overshoot occurs AND in addition the major support price level was touched.
To achieve this, you need to draw a horizontal line onto your chart at the price level of the major support. And you need to name this horizontal line "min".
After you have named the horizontal line "min", then the EA knows what it has to do. The Level1 EA now knows the price level of the trend channel overshoot and it knows the price level of the support zone.
Now the Level1 EA will compare both values and it will use the lowest of both values as the entry price of the first buy order.
In the following screenshot you can see that the beginning of the yellow area has now moved to the horizontal line.
In the following screenshot you can see the moment, when the Level1 EA has opened the first buy order, directly at the support price level.
The price jumped upwards immediately and reached the target price level. The distance of the target price was defined in the parameters of the Level1 EA.
Now you will see, how you can optimize the profits with visual judgement of the chart situation and further instructions for the Level1 EA.
Mini-Bubbles and Mini-Crashes tend to develop a trend reversal which usually reaches the base trend line of the first trend channel.
You can use this information and decide that you want to hold the trade until this base trend line is reached.
To achieve this in a partly automated way with the Level1 EA, you can name the base trend line of the first trend channel "t".
The EA will then know that it needs to adjust the target price of all opened orders to the current value of the trend line with name "t".
In the following screenshot you can see the adjusted target price according to the current value of the trend line.
Hint: Because the trend line is descending, the target price will be slightly adjusted to the downside with every new candle.
In addition to the moving target price, you can also define a moving stop loss, which adjusts with every new candle.
To achieve a moving stop loss, you need to draw a trend line. In this case, where we participate in a buy trade, you need to draw an ascending trend line.
After that, simply name this ascending trend line "s" and then the Level1 EA will adjust the stop loss of all opened orders with every new candle according to the current value of the trend line.