Contributors: Scriptor | Code by: barabashkakvn
The Bago EA leverages two key indicators: the iMA (Moving Average) and the iRSI (Relative Strength Index). This system is designed to help traders capitalize on market trends.
What is the Bago System?
The Bago system is primarily a trend-following strategy that relies on the crossover of the EMA 5 and EMA 12. When applied to an hourly chart, it has the potential to catch daily swings of over 100 pips. However, the sensitivity of using just a few EMAs can lead to frequent false signals, which may quickly drain your trading account. Therefore, implementing robust filters is crucial for maximizing the effectiveness of the Bago system.
While the Bago system is mainly discretionary, incorporating two effective filters opens the door to using automated trading systems that can generate high-probability signals. Our program is built to explore this exciting possibility.
The raw signal generation mechanism is straightforward: when the EMA 5 crosses above the EMA 12, and the RSI 21 crosses the 50 level in the same direction, a signal is created. However, context is key; it's essential to consider where prices are located and the timing of these crosses.
Integrating the Vegas tunnel with the Bago system transforms the standard 2D price space into a more dynamic environment. This twist provides coordinates that enhance the accuracy of entry and exit points.
Our program first establishes simple rules that generate raw signals, then adds filtering rules to refine those signals. These additional rules are represented as parameters, making them easily adjustable and optimizable based on performance results.
Let’s dive into the details!
Fig. 1. Indicator values on bar #2
Fig. 2. Indicator values on bar #1
Here’s a look at the testing results on the EUR/USD H1:
I conducted separate tests for BUY and SELL, followed by a combined test.
Fig. 3. Only BUY test
Fig. 4. Only SELL test
Fig. 5. Test with both BUY and SELL enabled
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