Fibo Pivot 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:
- Fibo Pivot Expert Advisor For MT4
- The Fibo Pivot Expert Advisor for MT4 – Overview
- The Fibo Pivot Expert Advisor for MT4 – Entry Criteria
- The Fibo Pivot Expert Advisor for MT4 – Exit Criteria
- The Fibo Pivot Expert Advisor for MT4 – Room for Improvement
The Fibo Pivot Expert Advisor For MT4 is founded on the principle of pivot point in technical analysis. The robot computes the pivot point by adding the high, low and close values of the previous candle on the daily timeframe and then dividing by three.
The result is a price level or pivot point deemed to indicate market sentiment or movement on the current day. In addition to the pivot point, the robot also defines three resistance and three support levels. These levels are measured from the pivot point and placed at prices determined by the range of the previous candle.
The Fibo Pivot Expert Advisor for MT4 – Overview
While the resistance levels are located 0.382, 0.618 and 1.0 times the candle range above the pivot point, the support levels are situated 0.382, 0.618 and 1.0 times the candle range below the pivot point. The robot seems to have gotten its name from this combination of pivot point and Fibonacci numbers. In trading, the support and resistance levels are considered points of interest where price might stall and reverse to the opposite direction. If the levels are violated, it means that the trend is strong and might continue in the direction of the breakout.
Running the expert advisor in the strategy tester essentially resulted in a breakeven performance. The robot performed fairly well at the beginning but slowly lost ground in the middle of testing. In the end, the expert advisor managed to get close to breakeven. This result gives the impression that this robot might become profitable if improved, implemented in another trading instrument, or applied in a different trading condition.
The Fibo Pivot Expert Advisor for MT4 – Entry Criteria
The Fibo Pivot Expert Advisor for MT4 is a simple mechanical trading system, judging by the number of functions used to develop the program. The robot only computes the value of one point for the current symbol the first time it is dropped on the chart. Minimal calculations are performed on every tick when the robot embarks on a search for trade entry in case there is no open trade yet on the current symbol.
The expert advisor gives the user four parameters to work on in Inputs, only the bare minimum to determine if the program can generate money for the user or not. These parameters are presented and explained below:
- TP = 50 – Each trade opened by this expert advisor will have a take profit of 50 pips.
- SL = 25 – Each trade taken by this expert advisor will have a stop loss of 25 pips.
- Lots = 0.01 – Each trade will have this lot size by default unless the user sets another value.
- Magic = 69 – This variable refers to the magic number of open orders. This number is used to identify the trades opened by this robot to facilitate trade management.
The robot does not use any type of technical indicator to define a trade entry. While it is possible to use a custom pivot point indicator and import its values when considering an entry, in this trading system the pivot point value is calculated directly within the code. As pointed out in the beginning of this article, the pivot point is an average of the high, low and close values of the daily candle. The pivot point price is not plotted on the chart as a horizontal line for reference by the user. Instead, the expert advisor obtains this price on every tick and stores it in memory.
The expert advisor can open up to two trades simultaneously or sequentially. One of the trades is a buy, and the other is a sell. At other times, the robot will open one trade only (i.e., a buy or a sell). If there is no buy trade yet, the robot will check if the current ask price is the same as the pivot price of the previous day and, if so, opens a buy trade. If there is no sell trade yet, the robot will determine if the current bid price is the same as the pivot price of the previous day and, if so, opens a sell trade.
Specific scenarios must occur before a buy or sell trade can be executed. For a buy trade, the open price of the current day must be lower than the pivot price of the previous day and the ask price must later cross above the pivot line from below at the same price. For a sell trade, the open price of the current day must be higher than the pivot price of the previous day and the bid price must later cross below the pivot line from above at the same price. If the market was volatile when this crossover happened, resulting in a jump in price, the market price and the pivot price might not meet at the same price. In these scenarios, the trades will not be triggered.
During volatile times, entry might prove difficult since price might continue moving in the trend direction without making pullbacks. Since the pivot price is normally in between the high, low and close prices, the market might not touch the pivot point in trending conditions. Since the expert advisor uses the pivot point only as the trade trigger, it would need a full market reversal to enter trades and make profits. A market pullback would normally result in loss.
If a trade entry is triggered, the trade will have a lot size of 0.01 as defined in the expert settings. At the time of entry, the stop loss and take profit objectives are set in place. For a buy trade, the stop loss is set 25 pips below the entry price, and the take profit is set 50 pips above entry. For a sell trade, the stop loss is located 25 pips above the entry price, and the take profit is located 50 pips below entry.
The Fibo Pivot Expert Advisor for MT4 – Exit Criteria
The Fibo Pivot Expert Advisor for MT4 does not actively manage its trades after entry. Since open trades have take profit and stop loss targets, the robot lies in wait until either target is reached. If the stop loss is hit by price, the trade ends in loss, but if the take profit is achieved, the trade results in profit. Each trade has only two possible outcomes, and nothing comes in between. This is because trailing stop or breakeven function is not used. This money management is favorable for the trader since the take profit is two times greater than the stop loss. If the logic of the trade entry is sound, the strategy might play out well after a good number of trades.
The Fibo Pivot Expert Advisor for MT4 – Room for Improvement
The Fibo Pivot Expert Advisor for MT4 requires some improvement to become profitable. As stated at the outset, the current trading performance is fundamentally breakeven. Although the win rate was low (i.e., around 34 percent), this weakness was offset by the huge reward-risk ratio (i.e., two). The robot might be able to generate profits if the entry criteria is refined a little. As observed in testing, the expert advisor is suitable for trading trending markets. The user is advised to use the robot in such markets.
At the perspective of a program developer, the code looks incomplete. The code includes computation of the weekly pivot, but this is not factored into the entry rules. Also, on every tick, the robot determines the values of three resistance and three support levels of the daily pivot. However, these values are not used during trade generation.