After a few months of testing and development I am glad to announce that the first release candidate for Watukushay No.5 is ready to be traded. Some days ago I talked about the first beta release and how I wanted to explore community based development before releasing the EA and after some limited success with this idea I have found enough profitable results for this system as to release the EA to all Asirikuy members. The release candidate of Watukushay No.5 will be ready for live trading featuring adequate error handling and functional decomposition with high-quality code that will allow us to have reliable and well-executed live trading results. During the next few paragraphs I want to share with you the importance of Watukushay No.5s achievements, a little bit about what I was able to achieve with this system and what it represents to the Asirikuy community.
As I mentioned on the previous post about this experts beta, Watukushay No.5 is a universal daily breakout system that is able to enter the market on a wide variety of circumstances adapting itself to the inherent characteristics of each different daily breakout it enters. Watukushay No.5 therefore belong to the same family as the turtle trading system and Kutichiy, aiming to profit from directional movements by entering the market after a given price value is broken towards the same side. However, Watukushay No.5 also includes a "fade mechanism" which also allows it to trade against breakouts and increases its flexibility to be profitable on currency pairs where fading certain movements is more profitable than trading the breakouts.
When I released the beta I had found the first EUR/USD profitable settings and I had some preliminary results for other currency pairs. Right now I am proud to say that I have reached profitable settings for this EA on the EUR/USD, USD/CHF, USD/JPY and GBP/USD. This is important since we only have a few systems that are able to trade the 4 majors and Watukushay No.5 will be able to introduce a lot of diversification power through its results on different currency pairs. Adding to this is the fact that the most profitable results (achieving a higher than 2:1 average compounded yearly profit to maximum draw down ratio) belong to the USD/CHF currency pair and NOT to the EUR/USD, giving us the power to diversify greatly against other trading systems like Teyacanani and Watukushay No.2 which achieve excellent results on this currency pair.
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Perhaps one of the most important things about this EA is its ability to constitute a viable portfolio on its own. The above image shows you the equity curve with yearly balance restarts (meaning that the internal balance of each instance is reset to the general account balance every 12 months) for Watukushay No.5 when trading the 4 majors at the same time. during the past 10 years. The portfolio of this EA achieves an average compounded yearly profit of 44% coupled with a maximum draw down level of 16% an excellent result only achievable up until now with a few other portfolios.
Despite the fact that all instances trade the same system it seems that maximum draw down periods do not tend to overlap since the different currency pairs are able to exploit their particular breakout inefficiency only under select market conditions that rotate amongst them. This in turn allows the different instances to hedge their draw down periods and achieve the above mentioned results which show this to be the case. Below you can also see the monthly profit chart for the portfolio obtained with 10 year backtests and a 1 year balance restarting technique. The system shows a high population of profitable months with a good number of highly profitable months that ensure the portfolios draw down remains under control. It is also worth mentioning that Watukushay No.5 was developed with all Watukushay Project principles in mind. The system was therefore developed with great care so that reliable simulations could be achieved.
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In summary, Watukushay No.5 is a great addition to Asirikuy featuring profitable results with similar draw down and profit targets on the 4 majors, a milestone achievement for Asirikuy portfolio system development. The system also showed excellent portfolio results, reason why its contributions to our long term profitability are bound to be important. Right now I have opened a poll within the Asirikuy community forum to choose a name for this EA and when the name is ready I will release the systems live trading version coupled with at least 2 account for live testing within Asirikuy.
If you would like to learn more about my journey in system development and how you too can develop your own likely long term profitable systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
