Golden Pickaxe
Table of Contents
Introduction.
The EA is published on November 23, 2022 by Valeriia Mishchenko.
This analysis is made according to the Version 1.39 updated on January 10, 2023.
“Golden Pickaxe” also exists in the Mt4 version, but we will focus on the Mt5 version.
The author himself explains that he uses a grid system of return to the average, I know the grid system, but with a return to the average? we will try to see later what it is about.
We also see that the author uses a marketing strategy for the price, at the moment he presents that there is 1 copy left at $1450 and the next price is $1650.
The author recommends 1:100 leverage for $1,000 if you take a lower leverage of 1:30 you need $6,000, as you might have margin problems. In my experience, an account with $6,000 leverage really means that there will be many lots open at the same time. We recognise the grid system and I wonder if a martingale would be the system called “return to average”.
“Golden Pickaxe” is to be installed on the chart “XAUUSD” (Gold) with the period M1. It is possible that EA is sensitive to fast changes like news, but the author has provided a news filter.
It is easy to install the EA, you even have a video available by the author.
Backtest
For the backtests I will use the broker ICMarket and the Ticks of Dukascopy. At first I will do with ICMarket from 2022 to 2023, the only objective for me is to do with the visual to see or not the presence of a martingale with the grid.
Thereafter I will test the EA in all the period until today January 31, 2023. Then there will be from 2010 and 2015 to January 31, 2023. The goal is to find a regularity in the EA in all periods. If the results are too different, there is probably an unfavourable or favourable period for the EA.
Then I would do the same manipulation with the Dukascopy Ticks. The goal is to have a 100% quality backtest, but between ICMarket and Dukascopy we should not have too much difference, at best if Dukascopy is favourable to EA.
I will also in both cases use a different management currency, there will be with fixed lot and the author controlled the risk in percentage, so we will make tests in all categories (0.5%, 1%, 1.5% and 2%). All other parameters will be default.
For the tests I will save the reports and use, “Quant Analyzer 4”.
Mode Visuel
Use the visual mode to observe the operation of the EA.
You can observe that the EA uses a grid system, we notice that several positions are open and that all the positions have a common SL, TP, which shows that the grid system is present, because what the EA is going to look for is to close all the positions together to make profit. (see box in blue)
We also notice a martingale system, the size of the lots is doubled at each new position as long as the grid is open. Thus we go from a position of lot sizes 0.01 to 0.02 and then 0.04. During my visual test, I observed large lot sizes and the sum of the lots leads to a strong DD (see box in red)
I also noticed that the Risk Reward is low, the TP is very close to the first open position.
On this picture the position is at the buy side at 1802.99 and the TP is at 1804.00 or 2.01 pips. The SL is at 1302.99 or 500 pips. So we have a RR = 2.01 / 500 = 0.00402 which is very low. It will take 250 winning trades for 1 losing trade.
ICMarket
We will start with ICMarket, I did the test with the real Ticks.
Entire history
At launch I find that with ICMarket the test starts on January 19, 2016. It seems that there are no data before this date.
Fixe lot
Low Risk 0.5%
Mid Risk 1%
Significant Risk 1.5%
High Risk 2%
Conclusion
With the “High Risk” finally has a difference. It is sure that 1 000$ when you have a great leverage is not enough to make a real difference between each management currency.
Since it is not possible for me to do tests before 2010, I cannot use my tool “Tool Scored” which allows me to note the EA to get an idea on the long-term reliability.
However, the quality of the history is very bad, only 6%.
Dukascopy
With Dukascopy it is possible to make the test since June 5, 2003, we will be able to use the tool “Tool Scored”.
Fixe lot
Entire History
2010 to 2023.01.31
2015 to 2023.01.31
Scored
We notice that the Risk Reward is well below 1. The Recovery Factor can be improved and the Profit Factor has an average of just 2. However, the Sharpe Ratio is not good for the periods before 2010.
As we have seen “Golden Pickaxe” uses a Grid and Martingale system. For this test we did not use a management currency, because the lot is fixed.
It obtains the mark of 10/20.
Low Risk 0.5%
Entire History
2010 to 2023.01.31
2015 to 2023.01.31
Scored
This time we have a real management currency. We can see that the Risk Reward is the same and it is well below 1. The recovery factor is not as good as the fixed lot, but the Sharpe ratio is much better thanks to the management currencies.
We obtain a score of 14/20 which is much better than the fixed lot.
Mid Risk 1%
Entire History
2010 to 2023.02.02
2015 to 2023.02.02
Scored
High Risk 2%
Entire
2010 to 2023.02.02
2015 to 2023.02.02
Score
Conclusion
I would like to point out a difference between using fixed lots and a management currency.
Despite the fact that we took the smallest lot to minimise the risk despite a lower profit we notice that the Sharpe ratio which evaluates the risk is worse with a fixed lot, the use of a money management with a low risk provides much better statistics. Below are the scores for fixed lot and low risk 0.5%.
We can see very well that the Sharpe ratio is better, but not only, the profit factor and the recovery ratio.
This is why it is important to use money management. Now we will see the difference with the Low Risk, the Mid Risk and the High Risk.
We notice that the higher the risk is, the worse the statistics are. The Risk Reward remains the same, but the best statistics are well in the Low Risk.
To finish with this conclusion I remind that the use of a grid and a martingale is risky.
I must also say that the gain is small with this EA yet we use risky systems, I want to prove it with all the sudden spikes of withdrawal that we can see with the different equity curves.
This analysis is according to my point of view, the best is to make yours.
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