Cross Expert Advisor For MT4

Cross 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!

 

Table Of Contents:

  1. Cross Expert Advisor For MT4
  2. The Cross Expert Advisor For MT4 – Entry Criteria
  3. The Cross Expert Advisor For MT4 – Exit Criteria
  4. The Cross Expert Advisor For MT4 – Room for Improvement

 

The Cross Expert Advisor For MT4, by the name itself, suggests that the trading system uses the moving average technical indicator for trade entry. However, in this case, only one moving average is used to define a trade opportunity. Normally, a cross means a crossover of two moving averages in one direction or the other. As a moving average strategy, in theory, the trading system can make money when the market being considered is trending more often than it is ranging in the traded timeframe.



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The Cross Expert Advisor For MT4 – Entry Criteria




The Cross Expert Advisor does not perform lengthy calculations before considering a trade entry. It simply looks at two conditions prior to trade hunting. If there are less than 100 bars on the current chart or if automated trading is not allowed by accident, the expert advisor immediately exits the main function and waits for these conditions to be true. Iteration is done by the tick, not on every candle.

The expert advisor comes with a limited number of parameters in Inputs, depicting its simplistic design. The user is given only the following three options to work with in expert settings:


  • MagicNumber = 15485 – The robot assigns this number to every trade it takes to facilitate identification and easy trade management. This information can be used also for monitoring of trade performance.

  • StopLoss = 100 – This amount is in points, not pips. It defines the stop loss on every trade.

  • TakeProfit = 200 – This amount is in points, not pips. It refers to the take profit on every trade.


The trading system employs one technical indicator in defining the trade entry. The setting and signal interpretation are covered below:


  • Moving average (period 200, exponential mode, price close) – The setting for moving average is typical for this indicator. The value of the moving average needed in trade identification is obtained from the active chart (symbol and period) and for the current open candle. If the current candle opens above the moving average, the signal is bullish. If the current candle opens below the moving average, the signal is bearish.


When the condition for trade entry is satisfied, the expert advisor immediately sends a trade request to the server. The lot size of the trade is hard coded into the function for sending orders, and it is the minimum trade volume allowed by the client terminal with respect to the trading account. Normally, this amount is 0.01 lot. The stop loss and take profit values are also sent for review by the trade server. When everything goes right, the trade request is approved and the trade is executed.

Since the robot does not check the current number of trades open on the current symbol and the user is not given an option in Inputs to define this value, the trading system can open as many trades as possible without limits if the entry rules are met. Protection of the trading account is afforded by the use of stop loss and minimal trade volume for each trade.



The Cross Expert Advisor For MT4 – Exit Criteria


The Cross Expert Advisor is not actively involved in managing trade orders when they go live. Any trade opened by the expert advisor can be closed in only one of two ways. First, if price hits the take profit target, the trade is closed in profit. Second, if price touches the stop loss limit, the trade is exited in loss for the trading account. The robot does not contain functions for breaking even and trailing stop when compared with many expert advisors that abound online.



The Cross Expert Advisor For MT4 – Room for Improvement


Since the Cross Expert Advisor uses the moving average as the indicator for trade direction and entry timing, this trading system becomes a trend-trading strategy. When the trend of the current market for the current chart is clear or price is moving strongly in one direction, this trading system is bound to make money for the trader. However, if market is hesitant and is moving without clear direction, loses may come about. Since markets tend to trend only 25 percent of the time, it goes without saying that this robot may encounter more losses than wins.

The expert advisor uses an open candle (i.e., current candle) when obtaining the value of the moving average. Since this candle is in the process of development, it can open in one place and close in another place. This should not have been an issue if the expert advisor considers the open price of the current candle in generating the EMA value. To remedy this issue, the program can be revised to change the indicator setting from price close to price open. Alternatively, the shift of the bar used in determining the moving average value can be changed from current to previous candle.

If the user is familiar with MQL4 coding, he can easily see that the default lot size is hard coded in the order send function. This prevents the user from setting another lot size value as he feels necessary or as the trading account size requires. Normally, the lot size is one option provided in Inputs.

Looking at the trading system in action in back testing, one can see that trades are not spaced out properly. Since the robot can open multiple orders as the situation arises and the maximum limit is not defined, it is possible for trades to populate in one price area at some point in trading. To control the drawdown on the current account and prevent frequent losses, spacing of trades should be considered. One way to do this is to check if the current price is at a certain distance from the open price of the previous trade. If that is the case, then a new trade can be taken.

A testing was done to determine how the trading system fares in back testing. The test was run using seven months of historical price using one foreign exchange symbol and 15-minute chart. Unfortunately, the robot did not produce profits in the testing. It executed a total of 525 trades in the test duration, averaging 75 trades per month. Drawdown was acceptable, though. It was less than one percent. However, the win rate is on the low side. The robot managed to win 31 percent of the trades.

It appears this winning percentage is not enough to generate profits for the trader. While strategies using a risk-reward ratio of one can only succeed if the win rate is greater than 50 percent, a risk-reward ratio of two is more forgiving. It can actually live off a lower win rate. It is not clear why the robot failed to make money in this instance. Perhaps a higher win rate is necessary.

To push the win rate a little higher, the user or program creator may consider adding one filter. This filter will ensure that trades taken in the direction of the trend are those located in cheap or discount areas. In other words, the price is undervalued or overvalued. Price is said to be undervalued when it is oversold in an oscillator, and price is considered overvalued if the oscillator gives an overbought reading.

When the filter above is added, a buy trade will be taken when the indicator is oversold and the trend is going up, and a sell trade is executed when the indicator is overbought and the trend is going down. There are many indicators that can fulfill this role. The most familiar ones are relative strength index and stochastic. A newcomer in the trade is the trader’s dynamic index or TDI.


 

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