Exp_Color_PEMA_Envelopes_Digit_System
This EA trades based on the Color PEMA Envelopes Digit System indicator, which uses a series of smoothed moving averages (PEMA - Period Exponential Moving Average) with envelope bands to identify trend direction and overbought/oversold zones. It opens buy positions when price touches the lower envelope in an uptrend and sell positions when price touches the upper envelope in a downtrend, using the color transitions of the PEMA lines as entry and exit signals.
Open the interactive view (equity curve, symbol switch)Key facts
Backtest results (H1, about 1 year)
| Symbol | P&L | Annual | Max DD | Trades | Win rate | Sharpe | Recovery | Losing streak | Per trade | Status |
|---|---|---|---|---|---|---|---|---|---|---|
| EURUSD | 0.00% | 0.00% | 0.00% | 0 | — | — | — | — | — | Not convertible yet |
| GBPUSD | 0.00% | 0.00% | 0.00% | 0 | — | — | — | — | — | Not convertible yet |
| USDJPY | 0.00% | 0.00% | 0.00% | 0 | — | — | — | — | — | Not convertible yet |
| XAUUSD | 0.00% | 0.00% | 0.00% | 0 | — | — | — | — | — | Not convertible yet |
Why this EA never traded: an indicator ended up with a period of 0.
Converted from MQL5 to Python and run with the same rules for every EA. Positions use MT5 lot sizes (100,000 units per FX lot, 100 oz per gold lot) with 1:100 leverage, one order at a time, and a stop-out below 10% of the starting balance. Sharpe is computed from the equity curve. Results marked as unreliable are shown for completeness only.
Blow-up risk: No blow-up pattern found
None of the usual blow-up patterns were found in the code, and the account was not stopped out in our backtests. That is not a guarantee: any EA can lose money.
High: stopped out in our backtest, or martingale/grid sizing without a stop loss. Elevated: martingale or grid sizing with a stop loss, or several positions at once without a stop loss. What the label means and what we found →
Strategy analysis
The core strategy of this EA is based on the Color PEMA Envelopes Digit System, which uses multiple layers of smoothed exponential moving averages to determine trend direction. Entry conditions are: open a buy position when the PEMA main line shows an uptrend (blue color) and price retraces to the lower envelope band; open a sell position when the PEMA main line shows a downtrend (red color) and price bounces to the upper envelope band. Exit conditions rely on PEMA line color reversal signals, meaning positions are closed when the trend direction changes. Position sizing supports fixed lot trading as well as dynamic lot sizing based on account balance. Money management provides stop loss and take profit settings, and the envelope band width adaptively reflects market volatility, serving as a volatility filter to some extent. This strategy is a hybrid of trend following and mean reversion, entering on pullbacks within trends, balancing trend confirmation with entry timing optimization.
Strengths
- Combines trend following with envelope pullback entries, providing better entry points and avoiding chasing price
- Multi-layer PEMA smoothing reduces false signals and improves trend identification reliability
- Envelope band width adapts to volatility, providing good adaptability under different market conditions
Weaknesses
- Exit during trend reversals may lag due to PEMA smoothing causing signal delay
- Lacks an explicit sideways market filter, which may generate frequent false signals in ranging markets
- Default stop loss is 0, posing unlimited loss risk if users do not manually set it
Possible improvements
- Add a sideways market filter (such as ADX indicator or volatility contraction identification) to avoid false signals in ranging markets
- Add a new bar check mechanism to prevent repeated position opening within the same bar, improving signal quality
Risk assessment
Overall risk: Medium
- Default stop loss of 0 poses unlimited loss risk if users do not configure it
- Lack of sideways market filter may cause consecutive losses in ranging markets
- Signal delay from PEMA smoothing may cause late entries or late exits
Evaluation scores
Parameters
| Parameter | Default | Description |
|---|---|---|
MoneyManagement | false | Enable money management (dynamic lot sizing) |
LotSize | 0.1 | Lot size per leg |
StopLoss | 0 | Auto stop loss in points; 0=disabled |
TakeProfit | 0 | Auto take profit in points; 0=disabled |
TrailingStop | 0 | Trailing stop in points, 0 to disable |
RiskPercent | 2.0 | Risk percentage per trade (in money management mode) |
PEMA_Period | 34 | PEMA main line calculation period |
EnvelopeDev | 0.2 | Envelope band deviation coefficient |
Timeframe | PERIOD_CURRENT | Timeframe used for indicator calculation |
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Backtests are historical simulations and do not guarantee future results. Not financial advice.