Daily Break Point 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:
- Daily Break Point Expert Advisor For MT4
- The Daily Break Point Expert Advisor for MT4 – Parameters
- The Daily Break Point Expert Advisor for MT4 – Entry Criteria
- The Daily Break Point Expert Advisor for MT4 – Exit Criteria
- The Daily Break Point Expert Advisor for MT4 – Room for Improvement
The Daily Break Point Expert Advisor For MT4 is a simple mechanical trading system that employs pure price action in trading the markets. The robot got its name from the concept of breaking away from the open price of the current candle on the daily chart. It does not matter if the robot is applied to a timeframe other than the daily period. The break point is defined as a distance of 20 pips above the open price if the candle is bullish or 20 pips below the open price if the candle is bearish.
The Daily Break Point Expert Advisor for MT4 – Parameters
The Daily Break Point Expert Advisor performs a trade search when a new candle has formed on the current timeframe. The search for trade signal is done only one time for each candle and if there is no open trade yet on the current symbol. If a market order happens to be present when a new signal has occurred, the open order will be closed by the robot if the new trade will be taken in the opposite direction.
The expert advisor offers the user several settings to work on in inputs. Only the most important variables and those that are actually used in the trading algorithm are presented below:
- LotAuto = True – By default, the expert advisor determines the trade lot size based on the account balance.
- LotManual = 0.01 – If the LotAuto variable is set to false, the program would use this manual lot size for trade entries.
- TakeProfit = 30 – This variable is not used to set the take profit of trades at the time of entry. When a trade has become profitable and has gained at least 30 pips, the trade is forcibly closed by the robot.
- CloseBySignal = true – This parameter is used to close an old trade if a new trade of the opposite type has been taken.
- Slippage = 3 – The slippage is one factor in the success or failure of a trade request. If price has moved 3 points from the requested price due to market volatility or delayed server response, the expert advisor cancels the trade request.
- EnableStrategy1 = true – This setting means that the expert advisor would trade the first strategy, which is based on price movement or break away from the open price of the current daily candle.
- Strat1_BreakPoint = 20 – This is the number of pips above or below the daily open of the current candle beyond which price is said to be in breakout mode.
- Strat1_LastBarSizeMin = 5 – This is the minimum distance in pips between the open and close of the previous candle for a trade setup to be valid.
- Strat1_LastBarSizeMax = 50 – This is the maximum distance in pips between the open and close of the previous candle for a trade setup to be valid.
- Strat1_TrailStart = 5 – This variable is utilized when a trade is winning and when the stop loss will be adjusted for the first time. Trailing starts when a trade has gained at least 5 pips.
- Strat1_TrailStop = 2 – When trailing starts, the stop loss is moved 2 pips beyond the entry price.
- Strat1_TrailStep = 2 – After the stop loss of a trade is adjusted initially, the stop loss is modified every time the trade gains 2 pips.
- Strat1_Magic = 900001 – This is the magic number assigned to trades taken using strategy one.
The Daily Break Point Expert Advisor for MT4 – Entry Criteria
This trading system uses price action to define and qualify an entry signal. Basically, it looks at the sentiment of the current and previous candles and checks if a certain threshold is reached. The exact manner of using price action to generate a trade signal is explained below:
- Candlesticks – The robot obtains three prices from the current and previous bars. The first price is the open price of the current candle on the daily chart. The second price is the open price of the previous candle. The third price is the close price of the previous candle. A buy signal is generated if the following conditions are met: close price is greater than open price for the previous candle, range between close and open prices of the previous candle is greater than 5 pips but less than 50 pips, current price has moved at least 20 pips beyond the daily open price, and breakout point should be within the range of the open and close prices of the previous candle. A sell signal is generated when an opposite scenario occurs.
When a trade signal has been generated, the expert advisor opens a buy or sell trade with a lot size that is proportional to the account balance. This lot size is determined by the robot itself. As observed in testing, the trade lot size set by the robot is higher than normal. If the user wants to reduce the risk on every trade, he can disable auto lot sizing and assign a static lot size instead.
The Daily Break Point Expert Advisor for MT4 – Exit Criteria
The Daily Break Point Expert Advisor does not assign a stop loss and take profit to a trade at the time of execution. Take profit is not used at all throughout the life of the open trade. On the other hand, stop loss is defined the moment a trade becomes profitable. This is done using trailing stop and trailing step functions. When trailing stop is activated, the expert advisor secures the trade immediately by locking some profits without stopping by at the breakeven point.
Stop trailing is done in two phases. The first phase occurs the first time a trade gains at least five pips. At this point, the stop loss is shifted two pips beyond the entry price in the direction of positive profit. Every time the trade gains two more pips, the stop loss is adjusted by the same number of pips. This continues until the new stop loss is hit. If the trend in the trade direction happens to be strong, the trade could gain more pips. In the code, the developer did a good job of making sure the two phases of stop trailing do not get mixed up. See the code snippet above.
Normally, a market order has a short live time, making the expert advisor a scalping trading system. The only time a trade stays longer than usual is when the trade is taken in the wrong side of the market. In this case, the trade ends up losing much money in most instances. This trading episode is unfortunately common for this expert advisor.
The Daily Break Point Expert Advisor for MT4 – Room for Improvement
The Daily Break Point Expert Advisor needs some improvement to be able to deliver positive results. In testing, the robot failed big time, although its win rate was around 80 percent. The cause of poor performance was the method used in closing a losing trade, which is done when a new signal in the opposite direction has developed.
Apart from the logic for trade exit, the code itself needs improvement as well. In several instances, statements are used in the code, but they actually serve no purpose in trade operations. The most obvious flaw is the use of several external variables that give the idea that the program offers two strategies for entry. However, the last strategy is not really used down the line, wasting a lot of code space in the global area. In the code snippet above, the boxed block of code can be removed without affecting the program.