MACD Sample Hedging Grid 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 MACD Sample Hedging Grid Expert Advisor For MT4 is a simple but promising expert advisor for MT4 platform. It is designed to take advantage of market trends by using three technical indicators that show momentum and direction. These indicators are the exponential moving average, moving average convergence and divergence (MACD) and momentum.
With the addition of a sound money management strategy, the robot shows a rising equity curve with positive results and low drawdown in the strategy tester. Money management is done in this manner. When a trade runs against the current trend, resulting in negative running profit, and exceeds a certain percentage, the trade is closed for a loss and the robot finds the next trading opportunity. This type of money management makes sense as it gives the trading system more chances of playing out in the future. Statistically, it takes a good amount of trades before a trading strategy can be judged profitable or not.
The MACD Sample Hedging Grid Expert Advisor For MT4 – Entry Criteria
The MACD Sample Hedging Grid Expert Advisor for MT4 looks for trade entry at the open of a new candle. When a new candle has formed, the robot checks the trading account if it has enough free margin to take new trades. If this is true, the robot determines if there are more than 100 bars on the chart and if the take profit is more than 10 pips. Only after these initial checks are done will the robot move on to the technical indicators to see if the entry requirements are satisfied.
The technical indicators used in this robot and the default settings are detailed below:
- MACD (12, 26, 9) – This is the standard MACD parameters. In this strategy, the values of the main line and signal line for the previous and current candles are determined. For a buy trade, the signal line should be above the main line for the previous candle, and the main line should be above the signal line for the current candle. Then the robot will check if the MACD line for the current candle is below zero. If that is true, the absolute value of the MACD line for the current candle is taken to check if it is at least 3 pips (default) from the zero line. When all these conditions exist, the buy signal is valid. A sell signal will be given if the opposite scenario exists.
- EMA (26) – The robot uses only one moving average in this system. The only purpose of using this moving average is to determine its slope. If it is sloping upward, the signal is bullish, and if it is sloping downward, the signal is bearish. Only the EMA values of the current and previous candles are considered.
- Momentum (14) – This is the standard period for the momentum indicator. This indicator checks if the market momentum is not exhausted, meaning the market has just started a new trend and still has enough momentum to continue in the current direction. The momentum value should be less than 0.3 (default) for a valid signal. The momentum indicator does not give directional bias, only an indication of market strength or momentum.
All the three indicators above are applied to the timeframe where the robot is attached. Once all three are in agreement, a trade request is sent to the trade server to enter at market price. If at some point the trade entry conditions are satisfied, the robot will add another trade provided the number of trades opened by the robot on the current symbol is less than 10 (default).
The MACD Sample Hedging Grid Expert Advisor For MT4 – Exit Criteria
The MACD Sample Hedging Grid Expert Advisor for MT4 always takes trades with stop orders. The default stop loss is 500 pips, and the default take profit is 50 pips. There are many ways that trades can be closed with this robot. Apart from hitting the stop loss or take profit price, trades can be closed at different prices as the breakeven and trailing stop functions are enabled by default.
With the breakeven function, any profitable trade will have its stop loss moved to breakeven when it has gained at least 30 pips (default). Thereafter, if the trade gains more pips, the trailing stop function will take over. It is always possible that any profitable trade will have adjusted stop loss before reaching the take profit target. Once trail stop is triggered, the robot will monitor the distance between the current market price and the stop loss. If this distance is equal to or more than 30 pips, the stop loss will be adjusted continuously. This will continue until price hits either the running stop loss or the take profit objective. In any case, the trade result is positive for the trading account.
The MACD Sample Hedging Grid Expert Advisor For MT4 – Rooms for Improvement
The MACD Sample Hedging Grid Expert Advisor for MT4 is a profitable algorithmic trading system in the strategy tester in its current settings. However, anyone interested to use this robot for real trading must run it first in a demo account for some period of time before real money is put on the line. One reason for this profitability might be the effective entry strategy being used. The settings used for the three indicators might have complemented each other.
Another possible reason why the robot gives positive results in back testing is its approach to money management and trade management. The robot does not use martingale strategy when adding new trades. All trades are placed at the same trade volume. The default equity stop out of one percent might have served the robot fairly well as it closes one or more losing trades at the first sign of trouble. This ensures the trading account survives long enough to give it more chances of making money in the long run.
If there is one thing that should be improved in this robot is the way additional trades are taken. It is possible that subsequent trades are taken at a proximate distance from previous trades, which is not optimal if a small drawdown is desired for the trading account. The trades must be spaced out by a predetermined distance. This way the frequency of liquidating losing trades is reduced.