555 Scalper Expert Advisor For MT4
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 Grid Assistant Expert Advisor is a powerful mechanical trading system for MetaTrader4 platform. By default, it opens multiple trades in the active symbol when a set of rules is satisfied. As such, the user must be careful in using this trading system in live trading. Testing the robot in the strategy tester and demo trading for a good amount of time is recommended to get a feel of how the robot works and to control risk.
The Grid Assistant Expert Advisor – Trade Entry Criteria
The Grid Assistant Expert Advisor looks for trade opportunities at the start of a new candle. If a new bar has formed on the current timeframe, the expert advisor will check if there are enough bars on the chart and if take profit is more than 10 pips. Afterward, the robot will read the technical indicators for trade signal.
Here are some of the parameters available for the user to adjust in Inputs:
- Lots = 0.01 – This is the lot size of each trade.
- TrailingStop = 40 – This value is in pips. The stop loss of winning trades will be trailed when they gain at least 40 pips.
- Stop_Loss = 20 – This value is in pips. It is the nominal stop loss distance of every trade. The actual stop loss distance factors in the current spread of the underlying instrument.
- MagicNumber = 1234 – This number is assigned to the trades taken by the robot to differentiate them from other trades taken by other robots.
- Take_Profit = 50 – This value is in pips. It is the nominal take profit distance of each trade.
- UseEquityStop = true – If this is true, trades taken by this robot will be closed when they are losing and the drawdown falls below a predefined threshold.
- TotalEquityRisk = 1.0 – This is the drawdown threshold at which point losing trades will be closed in loss.
- Max_Trades = 10 – The expert advisor can take up to 10 trades for the current symbol unless the user adjusts this value.
By default, the lot size of all trades is 0.01 unless modified by the user. When a trade request is sent to the server, the stop orders for stop loss and take profit are included. While the default stop loss is 20 pips, the robot adds the current spread to the stop loss, increasing the trade risk in the process. At the same time, the spread is deducted from the 50-pip take profit, making the trade less profitable by the amount of the spread. As long as the entry rules are satisfied, the robot will keep adding trades until the maximum number is reached (10 trades). Trades are only added at the beginning of a new candle.
If one of the trades loses, it will be replaced by another trade of the opposite type. If the previous trade was a sell and ended in loss, a buy trade will be opened on the next candle to cover the losing trade. The set of trade entry rules contains many factors and includes the signal provided by technical indicators. The technical indicators in use, their settings and signals given are outlined below:
- Moving averages (period 5, exponential mode, price high and price low) – Two exponential moving averages (one applied to the high price and another applied to low price) are being used to track price movement and identify breakout scenarios. They look like a channel containing price action on the main chart (see image above). The EMA values of the current open candle for the current period are being computed to define the trade direction. If the current bar opens above the low EMA channel, that is a bullish signal. If the current bar opens below the high EMA channel, it is taken as a bearish signal.
- Moving averages (period 6 and 85, linear weighted, price typical) – The settings of these two moving averages are not standard, and the values are obtained from the current candle of the next lower timeframe. If the fast LWMA is above the slow LWMA, the trend is up. If the 6 LWMA is below the 85 LWMA, the trend is down.
- Momentum (standard) – The momentum values are obtained for the previous three candles of the next higher timeframe. If any of the values is less than 0.3 (default), the trade signal provided by the other indicators are confirmed, meaning the robot will take the trade opportunity as the market is deemed to have enough momentum to continue moving in a certain direction.
The Grid Assistant Expert Advisor – Trade Exit Criteria
The Grid Assistant Expert Advisor puts the safety of the trading account into monitor status on every new candle. This is because the UseEquityStop parameter is set to true by default. The expert advisor looks at the current drawdown first before looking for new trades. If the account equity is less than the account balance, meaning the running profit of all open trades is negative, and if the drawdown exceeds one percent (TotalEquityRisk), all trades opened by the robot will be closed at once.
Apart from the take profit and stop loss protective stops, the expert advisor also makes use of trail stop and breakeven to manage trades. When a winning trade gains at least 30 pips, its stop loss will be moved to breakeven at first. Afterward, if the trade gains 10 more pips (for a total of 40 pips from entry), its stop loss will be trailed continuously until the trade either hits the take profit target of 50 pips, which is a mere 10 pips ahead, or the newly adjusted stop loss. In both cases, the trade ends in positive profit. Stop losses are trailed individually for each trade.
The Grid Assistant Expert Advisor – Suggestions for Improvement
The Grid Assistant Expert Advisor is not yet suitable for live trading. During testing, the equity curve swung up and down several times from both sides of the profit line (positive and negative). Gains were immediately covered by losses, and losses were quickly replaced by gains. This type of trading performance is normally not acceptable for serious traders and investors. Back testing using five months of historical data surprisingly ended in minimal loss. The robot averaged 200 trades per month, with less than four percent maximum drawdown, and around 30 percent win rate.
Most of the time trades are packed closely together in very tight price ranges, which could have contributed to the unsatisfactory performance. It would be better if open trades are spaced out regularly to reduce drawdown. Because stop losses are not adjusted to one price when a set of trades is winning, some trades were left behind when the market swung to the other direction and ended up losers. Having one stop loss price for all buy trades, for example, might be a good idea.
The trading method is only following the trend on the current chart. If price moves up and there are sell trades, the sell trades will hit stop loss and buy trades will be opened to replace the losing trades. If price then moves down and the stop loss of buy trades have not been moved to breakeven or trailed, price will hit the stop loss and sell trades will be opened in turn.
Therefore, this mechanical trading system is suitable for trending markets as shown by the rapid fluctuations in the equity curve. It suffered heavy losses when the market had no clear direction. The user is then advised to apply the robot in symbols that trend most of the time. While markets trend only about 25 percent of the time, some markets tend to trend more than they range and they can make explosive breakouts in one direction if influenced by strong economic data. Among the symbols that show strong tendency to trend are NZDUSD, USDCAD and EURAUD, to name just a few.