Meta-Trader - Atinalla FE Review

Welcome back Meta-Traders.

In this post we will review Atinalla FE.

Atinalla is a word in in Nahuatl - the language of the Aztecs in Mexico – which means possible. FE means “For Everyone” since this system has the distinction of being 1 of 2 of Daniel’s systems which are free of charge. You can find the original post and directions for downloading it here.

The other one of Daniel’s systems which is free is Watukushay FE which I reviewed here

So what exactly is Atinalla FE and what is it's logic?

Atinalla FE is a single expert advisor which trades 3 separate systems all against the EUR/USD on the one hour charts. The first of the 3 systems is Watukushay FE, so let’s start with an understanding of that system.

Watukushay FE takes its trading signals from the Wilder’s RSI indicator. RSI is simply the ratio of up movement to down movement over some period of time and is described here

Watukushay FE uses a 20-bar RSI plotted on the hourly chart. Once RSI reaches an extreme value (say 72) the system determines that an uptrend is in place and then waits for the RSI to fall below that same level to enter a long position. This allows new positions to be entered on a pullback in an uptrend. Once a position is in place, the Take Profit and Stop Loss values are set to a fixed percentage of the 14-day Average True Range.

There’s an additional bit of logic to close positions that goes as follows. Once a long position is in place, the RSI might fall below the entry level, say down to 50. Once the RSI then rises again to a level just under the original entry value, the position is exited. The logic here is that an uptrend is in place, and a pullback has occurred, and this up move in RSI is a resumption of the uptrend that allows the position to be closed at a profit.

An unscientific look at the back-test results, show that about 1/3 of the time, positions are closed using this alternate logic, and most of the time it is for a profit smaller than the original take profit value. Only occasionally does this alternate logic result in a loss.

The second of the 3 systems is based on the Commodity Channel Index (CCI) developed by Donald Lambert in the early 1980’s described here

The CCI is calculated as the difference between the typical price and its moving average, divided by the mean absolute deviation. CCI indicator values typically range between -100 and +100, but occasionally spikes to extreme values above +300 and below -300. It is these spikes that Atinalla FE uses to enter in the direction of the spike. In other words, on a spike above +300, the system will enter long. Once in a trade, the system will exit on a Take Profit and Stop Loss which are a fixed percentage of the 14-bar Average True Range. There is no other closing logic that I am aware of.

The last of the 3 systems is based on Bollinger Bands, developed by John Bollinger and described here. Bollinger Bands are calculated as an upper and lower band which are placed 2 standard deviations above and below a simple moving average of price. For long trades, the system will enter on a move of price above the upper band plus a fixed percentage of the 14-bar average true range. Short trades are entered on similar logic in the other direction.

Once a trade is placed, take profit and stop loss are a fixed percentage of the ATR, and similar to the CCI system, there is no additional closing logic.

What about performance?

Over a 10-year period, an initial investment of $1000 grew to just over $3026 which is about a 10.6% annual rate of return. The maximum drawdown over the test period was 8.44% which is not bad. Overall, the system does not compare favorably to some of Daniel’s other systems including Watukushay No2 and Teyacanani. Perhaps a more valid comparison would be between Atinalla FE and some of the other portfolios such as Atinalla #3 and Atipaq Full Portfolio. A worthy exercise to be sure, but out of scope for this article.

I uploaded the 10-year backtest results for the system to my yahoo group at http://finance.groups.yahoo.com/group/fx-mon/.

I started trading Atinalla FE live back in January of 2011 and the results can be found here. These results seem consistent with the live results found in Asirikuy over the same period.

One definitely cool thing about this system is the User Interface. The above screen shot shows the UI which reveals the inner workings of all 3 sub-systems in different colors. Using the UI, it’s easy to see what each system is doing, in terms of triggers, stop loss and take profits as well as Profit and Loss thus far for each sub-system.

One thing I didn’t consider when I started trading this system live is that it’s not NFA compliant. Specifically FIFO rules require that once a position is entered, any further positions on the same pair in the same direction must be closed before the original position can be closed. This would clearly cause an issue if one of the systems enters and attempts to exit, but cannot because another system has come along and placed a trade. I’m currently trading this system live in a Forex.com account (which requires NFA compliance). Another option would be to trade it in an FXDD account which has a back-office solution which makes NFA compliance a non-issue.

Hopefully, after the next presidential election, Dodd-Frank can be re-worked to get rid of these ridiculous NFA restrictions.

Overall, Atinalla FE is a solid contribution to the world of Automated Forex Trading. If you are not already a subscriber to Asirikuy.com, give it a try – the price is right!

Next up in our review series in Sapaq. Have a great week.