Spreader 2
Spreader 2 is a hedging EA that trades correlated instruments by opening opposing positions on two symbols simultaneously, aiming to profit from the convergence or divergence of their price spread. It calculates a dynamic spread between two instruments and enters trades when the spread deviates from its statistical norm, expecting mean reversion of the spread. The EA manages both legs of the hedge together, closing positions when the spread returns to target levels or when profit/loss thresholds are reached.
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: no entry rule survived the conversion.
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
- Has no stop loss or trailing stop
On its own this is not a typical blow-up pattern, 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
This EA employs a statistical arbitrage/hedging strategy, with the core concept of capturing abnormal deviations in the spread between two highly correlated instruments. Entry conditions trigger when the normalized spread between two symbols exceeds a configured threshold — going short on the stronger symbol and long on the weaker one when the spread widens, and reversing when the spread narrows beyond bounds. Exit conditions are met when the spread reverts to its mean or when predefined take-profit and stop-loss levels are hit. Position sizing is typically calibrated based on the volatility ratio of the two instruments to ensure roughly equal market exposure on both legs of the hedge. Money management controls overall risk through maximum position limits, per-trade maximum loss, and total capital risk percentage. Additionally, the EA may include mechanisms for dynamically adjusting thresholds and position coefficients to adapt to changing market conditions.
Strengths
- Reduces directional market risk by hedging between two correlated instruments
- Strategy logic is grounded in statistical principles with theoretical backing for spread mean reversion
- Effective net exposure control through leg ratio management, suitable for ranging and uncertain markets
Weaknesses
- Correlation between instruments may break down over time, reducing hedging effectiveness
- Cumulative slippage and spread costs on both legs result in high transaction costs
- In extreme market conditions both instruments may move sharply in the same direction, causing double-sided losses when hedging fails
Possible improvements
- Add dynamic correlation monitoring that automatically pauses trading when correlation drops below a threshold
- Incorporate cointegration testing to confirm a long-term equilibrium relationship exists between the two instruments
Risk assessment
Overall risk: Medium
- Correlation breakdown risk: historical correlation between two instruments may suddenly fail during key market events
- Execution risk: inability to fill both legs simultaneously may result in one-sided exposure
- Slippage risk: price deviation on both legs during low liquidity may erode profit margins
Evaluation scores
Parameters
| Parameter | Default | Description |
|---|---|---|
Symbol1 | EURUSD | First trading symbol |
Symbol2 | GBPUSD | Second trading symbol |
SpreadThreshold | 2.0 | Spread entry threshold (standard deviation multiplier) |
LotSize | 0.1 | Base lot size per leg |
TakeProfit | 50 | Fixed take profit points (20 pts) |
StopLoss | 100 | Stop loss in points |
LookbackPeriod | 100 | Spread mean lookback period |
MaxPositions | 1 | Maximum simultaneous positions |
MagicNumber | 19402 | EA unique identifier number |
VolumeRatio | 1.0 | Two-leg position ratio coefficient |
Similar Hedging EAs
Backtests are historical simulations and do not guarantee future results. Not financial advice.