Automating Volatility Index and Market Sentiment

Trading with EA using martingale strategy can be dangerous “IF”:

  1. No reverse martingale order if the trend changes the direction
  2. No stop loss and recovery
  3. Distance in points is too small during the market volatility.

Let’s stop at point number 3 above and elaborate a bit more. One of the strategies included in the Investment Castle EA is the reverse martingale and there’re two inputs for martingale and the opposite martingale.

Previously we used to increase the Distance to survive during the volatility of the market, but we used to lose many opportunities.

Now, by integrating the volatility index in the Investment Castle EA, both values for martingale and opposite martingale Distances are now automated based on the momentum and volatility index.

This means that the Distance will be narrow during the low volatility high during the high volatility times. And the result is lower drawdown and consistent profit.

Quick explanatoin on the chart to show the difference:

What is the value of this update?

Volatility Index Integration with Support & Resistance

The New Settings:

Effect of Distance / Volatility Ration on the Distance

The table above is available here.