EurGbp 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 EurGbp Expert Advisor for MetaTrader4 is an advanced automated trading system for MetaTrader4 platform. As the name suggests, this expert advisor is designed to be used in the EURGBP pair. While it appears that this trading system works in the strategy tester when applied to any currency pair and any period, the testing result cannot be used to judge the effectiveness of the robot for profit generation as the robot is designed to work in one currency pair (EURGBP) only. If the user wants to run the program in another trading symbol, the program code must be directly modified by hard coding the desired trading instruments.
This expert advisor applies the principle of triple hedging in generating and executing trade signals. This signal comes from the MACD values of the other two currency pairs (EURUSD and GBPUSD) forming the triple hedge with EURGBP. With this setup, the only way to test the robot for profitability is through demo trading using several months of live market data. To see if the trading algorithm works, testing in the strategy tester can be done, though. One such testing is discussed in the next paragraph.
Five months of testing using historical price data in one symbol and one period showed an interesting result. Minimal profit was gained, win rate was high (67 percent) and drawdown was low (less than one percent). It seems the robot does not take too many trades. In this testing, only 36 trades were executed in five months of data. Testing with the suggested EURGBP pair produced almost the same results.
The EurGbp Expert Advisor For MT4 – Entry Criteria
The EurGbp Expert Advisor looks for trade opportunities on every new candle. It does not perform deep mathematical calculations to obtain values for later display or for use in generating trade signals. Once a new candle has formed, the robot immediately executes its trading algorithm based on the default settings or the parameters set by the user in Inputs.
The user must fully understand the parameters and as necessary set new values so that the robot delivers as the user specifies. All parameters available to the user to adjust are listed and explained below:
- _Lots = 0.01 – Each trade taken by the robot will have a lot size of 0.01. The user can use another trade volume as he prefers.
- _SL = 75 – Each trade has a stop loss of 75 pips. The robot does not immediately place the stop loss when a trade request is sent to the trade server. The stop loss is added after the trade has been executed.
- _TP = 46 – Each trade has a take profit of 46 pips. The robot does not put the take profit right away when the trade request is sent to the server. As with the stop loss, the take profit is only added if the trade request was successful.
- _MagicNumber = 46226 – This number differentiates the trades taken by this robot from those taken by other robots. Other parameters can be used such as the order comment, but the magic number is the main identifier. This is important when other trading systems are being used in the same trading account.
- _Comment = "EurGbp EA" – This is the comment for all trades. This information is attached to a trade executed by the robot and can be useful in trade management and performance monitoring. The order comment is one information connected to any trade (both open and closed).
The expert advisor uses a set of moving average convergence divergence (MACD) indicators to identify a trading opportunity and to determine which side of the market to trade. The indicator settings used are outlined below:
- MACD (EURUSD symbol, hourly period, price close, main signal, first previous candle)
- MACD (EURUSD symbol, hourly period, price close, main signal, second previous candle)
- MACD (GBPUSD symbol, hourly period, price close, main signal, first previous candle)
- MACD (GBPUSD symbol, hourly period, price close, main signal, second previous candle)
As shown above, the expert advisor refers to the MACD values of two other currency pairs making up the triple hedge with EURGBP. However, in this case, the robot does not trade all three currency pairs to complete the perfect hedge. Only the MACD values are obtained from the other two currency pairs to be used in trading the third party to the hedge trio. The MACD values of the target symbol (i.e., EURGBP) are not determined and used at all.
The trade signal using the MACD values is generated in this manner. If the MACD value of the second previous candle of EURUSD is less than the MACD value of the second previous candle of GBPUSD and the MACD of the previous candle for EURUSD is greater than the MACD of the previous candle for GBPUSD, a buy signal is generated. If the symbols are reversed and the same conditions are used, a sell signal is indicated. This means that the concept of hedging is applied in this trading system by comparing the two previous MACD values of two related currency pairs to get a trading signal for the third currency pair included in the triple hedge.
The EurGbp Expert Advisor For MT4 – Exit Criteria
While the EurGbp Expert Advisor for MetaTrader4 looks complex from the outside, it uses a simple method in managing open trades. It wholly relies on the market to decide the fate of every trade. A trade will be profitable if it hits the take profit target or unprofitable if it hits the stop loss limit. The robot does not use trailing stop or breakeven to manage open orders.
At first glance, someone might assume that this trading system will not be profitable due to how the take profit and the stop loss are set up. With the default setting, the robot has to win approximately two times to get to the breakeven point if in case it comes from a losing trade. However, this expectation is not true at all. Testing reveals that the robot was able to make money regardless.
The EurGbp Expert Advisor For MT4 – Suggestions for Improvement
Judging by its program code, the EurGbp Expert Advisor is a sophisticated trading system created by someone with expert knowledge of the MQL4 programming language. The only way to get an idea on how the trading robot works is to observe it in action in the strategy tester. However, as already mentioned, the intention of running the robot in back testing should only be to understand if the trading algorithm works as designed.
The trading system takes the principle of triple currency hedging into effect. While it does not open trades in three different pairs simultaneously, it uses information from two correlated pairs to define the direction of the trade for the designated currency pair (EURGBP). Due to its design, the only way to know if the robot has the capacity to generate profits for the trader is through forward testing using a good amount of real-time market data. In this way, the robot can get the MACD values from the EURUSD and GBPUSD pairs to be used in trading the EURGBP pair.
This type of testing would take time. If possible, the user should consider doing the forward testing in a virtual private server to ensure that testing is run continuously without interruptions. This might be an individual journey for interested traders. Only those willing to invest the needed time in this journey can reap the potential reward. The hedging strategy is an area of trading that many traders find interesting to explore.