Grid 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:
- Grid Expert Advisor For MT4
- The Grid Expert Advisor For MT4 – Entry Criteria
- The Grid Expert Advisor For MT4 – Exit Criteria
- The Grid Expert Advisor For MT4 – Suggestions for Improvement
The Grid Expert Advisor is a grid trading strategy that uses pending orders to enter the market at predetermined levels. It spreads out grids or levels on the chart at equal intervals and then let the market come to those price levels. In this strategy, the expert advisor does not use technical indicators to identify the trend or employ price action methods to determine a trade opportunity. Trades are closed in profit or in loss when price gets to the next grid level.
Apart from using the grid strategy to place orders, the expert advisor also makes use of a form of martingale position sizing to extract quick profits from the markets. This money management technique is not completely a martingale as it does not double the lot size on the next trade. However, the subsequent lot sizes are increased by the same factor until the maximum number of pending orders is reached. While this type of position sizing may look dangerous, the robot utilizes a safety net by putting a stop loss to each trade.
The Grid Expert Advisor For MT4 – Entry Criteria
The Grid Expert Advisor immediately executes 20 pending orders the moment it is dropped on the chart. Half of the pending orders is a buy stop order, and half of them is a sell stop order. The buy stop orders are placed 10 pips above the current ask price, and the sell stop orders are put 10 pips below the current bid price. These pending orders work in pairs, and each pair is composed of a buy stop order and a sell stop order with the same lot size and the same distance from the preceding set of orders.
The trade volume of the first set of orders is 0.10 as defined in Inputs, and the subsequent sets of orders have a trade volume 0.10 greater than the immediately preceding set of orders. The lot sizes increase arithmetically but not exponentially as in the case of martingale lot sizing method. In addition, each order has a take profit of 10 pips and a stop loss of 10 pips. The take profit and stop loss prices are not obvious on the chart as they align well with the prices of the pending orders.
The expert advisor offers the following parameters that the user can adjust as necessary in the expert settings:
- TP = 10 – This number refers to the take profit of the stop orders in pips.
- SL = 10 – This number refers to the stop loss of the stop orders in pips.
- Lots = 0.10 – This amount is the initial lot size of orders.
- Magic = 69 – This figure is used to identify the trades taken by this expert advisor from those trades executed by other expert advisors on the same trading account.
- NumberOfTrades = 10 – This value specifies the maximum number of buy stop and sell stop orders that the robot will take at any given point. With this default value, the robot can take up to 10 buy stop orders and 10 sell stop orders.
- Distance = 10 – This value refers to the gap between adjoining stop orders. The default distance between orders is 10 pips.
The Grid robot does not use technical indicators to define the trend and time the entry. To enter the market, it places orders near the current market price and waits for the market to reach those orders and convert them into market orders. This trading strategy attempts to take advantage of market trends that happen about 25 percent of the time. When the trend is clear and the market is moving in a specific direction without major pullbacks, this trading system is bound to generate profits. However, when the market is in a range, the trading system will suffer a string of losses as the stop loss of trades is just 10 pips on the other side of the trend.
After the expert advisor has placed the 20 pending orders on the chart, new pending orders will be added if any of the previous stop orders become market orders. Right after one pending order turns into a market order, another pending order of the same type is immediately executed to replace the previous stop order. This maintains the number of pending orders open at any given time to 20.
Pending orders that are not converted into market orders will expire in 24 hours. When this happens, these orders will be closed at once and replaced by new pending orders added next to the latest pending orders in the set. When placing such orders, the expert advisor assigns the maximum lot size possible for the given number of maximum trades (i.e., 1.0 lot).
The Grid Expert Advisor For MT4 – Exit Criteria
The Grid Expert Advisor for MetaTrader4 mainly uses the take profit limit and stop loss limit to exit market orders. This is a passive approach to trade management. When a trade is closed by the client terminal after hitting take profit or stop loss, another pending order immediately takes its place, again maintaining the total number of pending orders to 20.
Since the take profit and stop loss targets are very close to the entry price (i.e., 10 pips), the expert advisor does not use trade modification by trailing the stop or moving the stop loss to breakeven when a trade gains a specific amount of points or pips. A trade is exited as a winner or a loser after which the trading cycle continues.
The Grid Expert Advisor For MT4 – Suggestions for Improvement
The Grid Expert Advisor for MetaTrader4 cannot be used at this point in time for live trading. This is because the robot does not yield a positive result yet in back testing using five months of historical data. In this testing, the program lost 40 percent of the capital, had a win rate of 37 percent (low figure) and suffered a drawdown of 45 percent.
At some points in the test run, the robot showed moments of recovery, but they were not enough to achieve a profitable result. When market was ranging, the robot performed really well, but when the trend is strongly moving in one direction, the robot experienced a series of losses and large drawdowns.
One way to improve the performance of the trading system is to adjust the stop orders closer to the market price after a predetermined period has passed such as on the next day. When the market trends strongly in one direction, the orders in the other direction were left behind, which limits the possibility of taking trades in the direction of the market correction.
Another possible flaw is the huge lot size of new trades as replacements of closed trades. It is possible to have more or less five pending orders with a lot size of 1.0 at a point in time. At other times, more than 10 stop orders will have a trade volume of 1.0. It would have been better to reset the whole array of pending orders to the original set of trade volumes from time to time so that the risk is controlled.
When the above suggestions are taken into consideration, the user needs to invest time in the strategy tester to determine the markets and periods as well as the combination of parameters that will produce positive results in terms of profit. If the user is capable, running the robot in the back tester with optimization is a good way to find out which settings would give the best results.