Day Trading 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 Day Trading Expert Advisor for MetaTrader4 is an automated trading system for MT4. While it is named as a day trading tool, trades taken by the robot are not actually closed at the end of trading day. They may remain open until the next day so long as the stop loss or take profit is not reached. The user can apply the expert advisor to any chart period, so it is possible that trades can stay open longer than one day. This expert advisor is applicable in both five-digit and four-digit brokers.
Anyone interested to use this expert advisor in trading is advised to do prolonged testing to determine the settings that yield returns. This is because testing using five months of historical price data for one symbol and one period resulted in negative profit and the overall metrics did not look good at all. Profit factor was less than one, maximal drawdown was average (2.5 percent), and win rate was low (25 percent). The user might get different results if the robot is applied to other symbols and timeframes.
The Day Trading Expert Advisor For MT4 – Entry Criteria
The Day Trading Expert Advisor for MT4 performs its trading algorithm at every new candle. If a new candle has formed, drawdown is within the tolerable range, there are more than 100 bars on the current chart, the take profit value in Inputs is more than 10 pips, trading account has enough free margin for new trades and there are no open trades yet in the current symbol or they are less than the maximum (10 trades default), the expert advisor will look for a trade entry.
- Lots = 0.01 – All trades taken by the robot will have this static lot size. The lot size does not vary by the amount of the account balance.
- TrailingStop = 40 – This value is in pips. The stop loss of a winning trade is trailed to secure profits from the moment it gains 40 pips.
- Stop_Loss = 20 – This value is in pips. It is the nominal stop loss distance of each trade. The actual stop loss takes the prevailing spread into consideration.
- MagicNumber = 1234 – This number identifies the trades taken by this expert advisor.
- Take_Profit = 50 – This value is in pips. It is the nominal take profit distance of each trade. The actual take profit takes the current spread into consideration.
- UseEquityStop = true – If this parameter is set to true, all trades taken by the robot will be closed when the aggregate drawdown reaches a certain level.
- TotalEquityRisk = 1 – Trades taken by the robot will be forcibly closed at a loss for the account once the drawdown reaches one percent of the account balance.
- Max_Trades = 10 – The robot can take up to 10 trades on the active symbol.
When a trade opportunity arises, the expert advisor will take a trade with a lot size of 0.01 and with stop loss and take profit specifications. However, the actual stop loss and take profit will not be the same as the values set by the user in Inputs. During trade execution, the robot adds the current spread to the stop loss price and subtracts the spread from the take profit price. Therefore, the risk is increased by the amount of spread at the time of trade execution and the reward is reduced by the same amount.
In addition, if the set of trade entry rules is met, a trade can be added on every new candle until the account reaches the maximum number of 10 trades. The trade entry signal comes from an array of technical indicators. What settings are used and how the values obtained from the indicators are interpreted as trade signal are discussed below:
- Moving average (period 100, exponential mode, price median) – This is the primary tool used for trend identification, along with price action. If the high price of the previous 10 candles is below the 100 EMA, the trend direction is down, and if the low price of the previous 10 bars is above the 100 EMA, the trend direction is up. The EMA is applied on the current period.
- Exponential moving averages (period 20, 60 and 100; exponential mode; price close) – Three exponential moving averages are applied on the current timeframe, and values are generated for the previous bar. A bullish signal is given if the low of any of the previous three bars is below the 20 EMA, 20 EMA is greater than 60 EMA and 60 EMA is greater than 100 EMA. On the contrary, a bearish signal is indicated if the low of any of the previous three bars is greater than 20 EMA, 20 EMA is less than 60 EMA and 60 EMA is less than 100 EMA.
- Momentum (period 14) – The momentum values are generated for the three previous candles on the current period. If any of the momentum values is less than 0.3, the trade signal provided by the other technical indicators are confirmed and a trade will be executed. As such, the momentum indicator is used confirmation of the trade entry. Its use is not only to confirm a trade but to increase the odds of winning.
The Day Trading Expert Advisor – Trade Exit Criteria
The Day Trading Expert Advisor uses trailing stop and breakeven functions, in addition to the stop orders for take profit and stop loss, in managing open trades. When a trade is live and gains at least 30 pips, its stop loss will be moved to the entry price for a risk-free trade. Even if there are multiple orders open concurrently on the active symbol, the robot will adjust the stop loss of each trade individually. Once the trade gains 40 pips, trailing stop starts working. The stop loss will be continually adjusted in the direction of the trade until price hits either the new stop loss or the take profit target. In either case, the trade will be exited in profit.
The robot will take only one type of trade at any point in a trade cycle. For example, when one or more trades open on the current symbol are buy trades, the subsequent trades will be buy trades as well. If the indicators give a bearish signal in between, the sell signal will be overlooked. The opposite scenario is true for the sell side. As with most other expert advisors, this robot adjusts the stop loss only; the take profit is maintained throughout the life of any trade.
Apart from the above exit strategies, the expert advisor uses equity stop to protect the account from unexpected disasters. In case, the net profit of open trades is negative and goes beyond a defined level, all such trades will be closed immediately, and the loss is accepted.
The Day Trading Expert Advisor – Suggestion for Improvement
As observed in the strategy tester, the Day Trading Expert Advisor is suitable for trend trading regardless of direction of price movement. This is evident just by looking at the graph of the equity curve in back testing. The equity curve rises quickly when the trend is strong in any direction, while it falls rapidly when the market is moving in trading ranges. Anyone interested to use this expert advisor should then pick trading symbols that exhibit trending behavior. Visiting the MT4 platform and looking at the daily and weekly charts will reveal which markets tend to move in a trending fashion.