10 Pips Expert Advisor For MT4
WE IMPROVED THIS EXPERT ADVISOR FOR YOU!!!
PLEASE NOTE: This expert advisor was publicly available for free usage on other websites and is not programmed by us. We explain the functionality and possible improvements of the EA. Furthermore, we are convinced that fully automatic Expert Advisors will fail in the long run. On the other hand, our semi-automatic approach with detecting the best setups and then activating our Expert Advisors (e.g. V-Power EA, EdgeZone EA) produced many successful traders and some of them even got prop traders at prop trading firms. Therefore, we added a similar semi-automatic trading feature (to allow only buy or only sell trades) to the free Expert Advisors. You can download the modified version here and enjoy!
The 10 Pips Expert Advisor For MT4 might not be aptly named. Looking at the external variables in Inputs, one can see that, by default, the take profit of each trade is 50 pips. This negates the idea that this trading system aims to make 10 pips at a time. However, if the user wants, he can easily adjust the value of the said external variable to stay true to the name of this expert advisor.
The 10 Pips Expert Advisor For MT4 – Entry Criteria
The 10 Pips Expert Advisor looks for a trade entry on every new candle. Before the search for entry signal starts, the robot performs several preliminary checks. If there are trades already opened by the expert advisor, it computes the total drawdown if it is within tolerable limits. If so, it inspects each trade if it can be moved to breakeven or trailed. If not, it will count the number of bars on the active chart if it is at least 100 and determine if the take profit is greater than 10 pips. Finally, it checks the free margin if a new trade can be added. Once these checks turn out to be successful, the robot embarks on the trade hunting operation.
Instead of relying on the default settings, the user can influence how the trading system works by making changes to the external variables in Inputs. With trial and error, the user can find the best combination that might give positive results. The options available to the user to modify are the following:
- Lots = 0.01 – The robot opens trades at a position size of 0.01 if the user keeps this value.
- TrailingStop = 40 – Trailing stop is activated when a trade earns 40 pips.
- Stop_Loss = 20 – The robot sets a 20-pip stop loss to each trade.
- MagicNumber = 1234 – The robot assigns this unique number to each trade it has executed.
- Take_Profit = 50 – The robot sets a 50-pip take profit to each trade.
- FastMA = 6 – The trading system uses a six-period moving average for trend detection.
- SlowMA = 85 – The trading system uses an 85-period moving average for trend detection.
- Mom_Sell = 0.3 – The momentum value is subtracted from 100 to get a lower value. If the new value is lower than 0.3, a sell signal is confirmed for entry.
- Mom_Buy = 0.3 – The momentum value is subtracted from 100 to obtain a lower value. If the new value is lower than 0.3, a buy signal is confirmed for entry.
- UseEquityStop = true – This variable controls whether or not the robot monitors the drawdown to protect the trading account. Since the value is true, the instantaneous drawdown is put on monitor status.
- TotalEquityRisk = 1.0 – Since the above parameter is true, the robot will liquidate all trades if their combined drawdown hits one percent of the balance.
- Max_Trades = 10 – If the user keeps this value, the robot may open up to 10 orders on the current symbol.
The trading system uses two technical indicators for trade entry generation and another indicator to confirm the trade entry. These technical tools and how they are used to define a trade entry are presented and discussed below:
- Moving average (period 8 and 50, typical price, linear weighted averaging) – The values of the moving averages needed for trade signal are derived from the open bar of the active period and symbol. A buy signal is generated if the 8 LWMA is above the 50 LWMA, and a sell signal is come by when the 8 LWMA is below the 50 LWMA.
- Candlestick – The high, low and close prices of the previous candle on the current period are obtained to filter the moving average signal. To confirm a buy signal, the low of the previous candle must be below the 8 LWMA and the close of the previous candle must be above the 8 LWMA. This means that the previous candle has crossed and closed above the 8 LWMA. To confirm a sell signal, the high of the previous candle must be above the 8 LWMA and the close of the previous candle must be below the 8 LWMA. This means that the previous candle has crossed and closed below the 8 LWMA.
- Momentum (price close, period 14) – The values of the previous three bars of the next higher period of the current symbol are determined first. Then these three values are subtracted each from 100. If any of the three differences is lower than 0.3, a trade signal is confirmed for entry.
When a trade signal has been generated and validated, the robot opens a trade with a position size of 0.01 as declared in Inputs. Upon trade entry, the stop loss and take profit values are set at the same time. While the defined take profit is 50 pips, the actual take profit is a spread lower than this amount. On the other hand, while the defined stop loss is 20 pips, the real stop loss is a spread higher than this amount.
After the initial trade has been opened, additional trades may be executed on subsequent candles as long as the entry rules are satisfied. As with the first trade, the subsequent trades will have a position size of 0.01, take profit of 50 pips and nominal stop loss of 20 pips. Only one trade can be opened on each candle. Trade addition continues until the number of trades open on the current symbol is equal to 10.
The 10 Pips Expert Advisor For MT4 – Exit Criteria
The 10 Pips Expert Advisor employs two types of trade exit strategies. The first strategy is a rather passive approach, allowing price to determine the fate of a trade through the use of stop loss and take profit. The second strategy, on the other hand, is more active in approach but only applies to winning trades, disturbing the balance between risk and reward in the process.
If a trade has bagged at least 30 pips, the stop loss will be shifted to the entry price. This is done only once. Thereafter, if the trade earns more pips and has earned 40 pips in total, trailing stop takes effect. This will continue until the trade closes by the new stop loss or the take profit, which is only 10 pips ahead when stop trailing started.
The 10 Pips Expert Advisor For MT4 – Suggestion for Improvement
The 10 Pips Expert Advisor is not yet ready for live trading. This conclusion was reached after running the expert advisor in test mode using five months of historical price data. By the equity curve itself, it is easy to figure out that the robot needs improvement. From beginning to end, the equity curve was going down and ended relatively far below the starting balance.
Possibly, the main reason for the poor performance can be gleaned from the test report. The main factor for failure could be the low win rate, which was only around 27 percent. Had the risk-reward ratio been significantly high, this could have compensated for the low winning percentage. At least a risk-reward ratio of three is needed. However, the actual ratio is more or less two.
One factor for the low win rate could be the number of trades open at one time. Having 10 open trades at the same time might not be a good idea. Also, the trades opened by the expert advisor seem to be scattered on the chart without clear separation. Setting a minimum gap between trades could revamp the performance of this trading system.