5 Minutes Scalper 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!
As the name suggests, the 5 Minutes Scalper Expert Advisor For MT4 is designed for trading the five-minute chart of any foreign exchange symbol, but the major currency pairs are preferable due to their tight spreads. In the image above, three moving averages are applied to the current timeframe to determine the trend and the direction of trades. However, other moving averages are used on another timeframe to act as trend filter. This way a trade or set of trades is only taken when multiple timeframes agree.
When run in the strategy tester using three months of test data, the trading system generated profit with a minimal drawdown and low win rate. However, this test duration is too short to be used to judge the profitability of this trading system. Thus, the user is enjoined to do further testing to confirm this positive result and then possibly use the robot in trading.
The 5 Minutes Scalper Expert Advisor For MT4 – Entry Criteria
The 5 Minutes Scalper Expert Advisor hunts for trades at the start of every candle. When the previous bar has closed and the current bar has opened, the expert advisor checks the drawdown first if it is manageable. If that is the case, it will inspect the open trades next, if there are any, to determine if their stop losses are ready to be adjusted to breakeven or more. Then the robot will count the number of bars on the active chart if it is not less than 100 and it will check if the take profit is not less than 10 pips. When the preliminary checks prove successful, the search for trade entry begins.
There are a few variables in Inputs that the user must understand and learn to use to make the best use of the trading system. The relevant variables with their default values are listed below:
- Lots = 0.01 – This is the position size for every trade taken by this expert advisor.
- TrailingStop = 40 – When a trade has acquired 40 pips, trailing stop takes effect to secure profits as the trade bags more pips.
- Stop_Loss = 20 – Each trade has an explicit stop loss of 20 pips upon trade execution.
- MagicNumber = 1234 – This integer is the main identifier of trades take by this expert advisor.
- Take_Profit = 50 – Each trade has a defined take profit of 50 pips during trade execution.
- FastMA = 6 – A moving average with a period of 6 is used for trend identification.
- SlowMA = 85 – Another moving average with a period of 85 is used for trend recognition.
- Mom_Sell = 0.3 – A sell signal is validated if the momentum value is less than 0.3.
- Mom_Buy = 0.3 – A buy signal is confirmed if the momentum value is less than 0.3.
- UseEquityStop = true – With this default setting, the expert advisor will monitor the drawdown of all open trades and then takes action if the drawdown reaches the maximum limit.
- TotalEquityRisk = 1.0 – This option means that the maximum limit for drawdown before the expert advisor closes all open trades is one percent of the account balance.
- Max_Trades = 10 – If the user keeps this default value, the robot can execute up to 10 trades on the current symbol.
This trading system musters three sets of technical indicators in order to find a high-probability trade entry. These indicators must come to an agreement before a trade entry is taken by the expert advisor. The indicators, settings and manner of signal generation are discussed below:
- Linear weighted moving averages (period 8, 13 and 21) – The three moving averages are used on typical price, and values are obtained from the current open candle of the current period and symbol. If the 8 LWMA is above the 13 LWMA and the 13 LWMA is above the 21 LWMA, a bullish signal is produced. However, if the 8 LWMA is below the 13 LWMA and the 13 LWMA is below the 21 LWMA, a bearish signal is generated.
- Linear weighted moving averages (period 6 and 85) – This is another set of linear weighted moving averages used for trend identification. The moving averages are also applied on typical price, but the values are obtained from the current bar on the next lower period of the current symbol. If the fast LWMA is above the slow LWMA, a bullish signal is provided. If the fast LWMA is below the slow LWMA, a bearish signal is indicated.
- Momentum (period 14) – This indicator is applied on the next higher period of the current symbol, and its values are generated from the previous three bars. If any of these three values is smaller than 0.3, the signal generated by the moving averages is confirmed. This confirmation is necessary to give a potential trade a little more chance to become profitable as the current market momentum is theoretically not exhausted.
When a trade signal has been determined and confirmed, the expert advisor will open a trade with a lot size of 0.01 as set out in Inputs. Each trade has a specified stop loss of 20 pips and a take profit of 50 pips, but these stop orders are not the actual values when the trade is executed. During trade entry, the spread is deducted from the take profit target and added to the stop loss limit.
When the entry rules are satisfied after the first trade has been taken, additional trades will be opened as long as the maximum number of 10 trades is not reached. The subsequent trades use the same position size of 0.01 lot, stop loss of 20 pips plus the spread, and take profit of 50 pips minus the spread.
The 5 Minutes Scalper Expert Advisor For MT4 – Exit Criteria
Apart from the take profit and stop loss prices, the orders opened by the 5 Minutes Scalper Expert Advisor can be closed at some other prices. The reason for this is the trailing and breakeven functions. While these functions attempt to secure profits and keep them in the winning side, the balance between reward and risk has been disturbed in the process. The end result is a high win rate with lower amounts of profit. In this case, the risk-reward ratio and win rate are out of sync.
The 5 Minutes Scalper Expert Advisor For MT4 – Room for Improvement
In the strategy tester, the 5 Minutes Scalper Expert Advisor performed well at the beginning, but the equity curve began to turn upside down toward the end of testing and ended a little above zero. Still the trading system managed to return a minimal amount of profit.
One can say that the overall positive performance was just a random result. It is possible that the market condition at the time of testing was favorable for the trading system so it yielded a good result. Looking at the development of the equity curve during testing can make one agree with this opinion. The expert advisor made money when the market was trending in one direction but lost money when the trend reversed or corrected.
One potential flaw in this trading system is the randomness of trade entries. The trades are scattered all over the chart without clear spacing. As a result, trades bunch together in a narrow price area. Allowing trades to overlap is not a good idea. To address this issue, a minimum distance should be set between trades. This change, though, can be done only programmatically. When such change is implemented, it is best to make the minimum distance between trades available as a variable in Inputs.