Martingale EA 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:
- Martingale EA Expert Advisor For MT4
- The Martingale EA Expert Advisor For MT4 – Entry Criteria
- The Martingale EA Expert Advisor For MT4 – Exit Criteria
- The Martingale EA Expert Advisor For MT4 – Room for Improvement
The Martingale EA Expert Advisor is a promising trading system that employs the envelope technical indicator that comes with the MetaTrader4 platform to generate trade signals. This expert advisor can trade any symbol of the foreign exchange market, but the 28 major symbols are preferred. The martingale qualification might be a misnomer for this robot as it does not double the lot size on the next trade using the default settings.
As depicted in the image above, the envelope indicator constrains the price action within its upper and lower boundaries. When price touches the upper boundary, the underlying market is said to be overbought, and when price comes into contact with the lower boundary, the market is considered oversold. In any case, a trade signal to the opposite direction is generated.
This robot shows promise as a potential profitable trading system. Running the expert advisor for five months of test data resulted in considerable profits, taking only a few trades throughout the test period. While this result sounds good and can make anyone excited to jump into the bandwagon, it is important that the user performs more testing to confirm this initial investigation and have more confidence in implementing the program in live trading.
The Martingale EA Expert Advisor For MT4 – Entry Criteria
The Martingale EA Expert Advisor looks for a trade opportunity every time a tick comes in. However, if there is an existing order in the active symbol, the robot will check at each tick if it is time to close the trade. Trade entry and trade closure are dictated by one and the same technical indicator, that is, envelope indicator.
There are a few variables provided in Inputs that the user can tweak until he finds the best settings. If the user is familiar with the envelope indicator, the variables below are already self-explanatory.
- Deviation = 0.5 – This value is the percent deviation used for the envelope indicator.
- IndPeriod = 50 – This is the period used for calculating the value of the envelope indicator.
- IndMode = MODE_SMA – The method used for the envelope indicator is simple averaging.
- IndPrice = PRICE_CLOSE – The envelope indicator is applied to the close price.
- Lots = 0.2 – This is the lot size of all trades. The user can change this value at any time.
This expert advisor utilizes one technical indicator for trade entry. This indicator and its settings are discussed below:
- Envelopes (period 50, simple method, price close, 0.50% deviation) – This indicator is implemented on the current period and symbol, and values are derived from the current candle. One value is for the upper envelope, and another value is for the lower envelope. A buy entry signal is generated if price dips 10 pips below the lower envelope. A sell entry signal is generated if price rises 10 pips above the upper envelope.
When there is no open order yet in the trading account for the active symbol and if the envelope indicator provides a buy or sell signal, a trade is immediately taken with a trade volume of 0.2 as specified in expert settings. If the user thinks this lot amount is too high, he can set another value. When the trade is executed, it does not come with a stop loss and take profit.
The expert advisor also displays some information on the chart that the user can use to monitor the performance of the trading system. With this information, the user will know if there are orders on the current symbol and how many. He can determine the current account balance and, in doing so, find out if the robot makes or loses money. He can see the equity and figure out if the current trade is winning or losing. He can also follow the current signal provided by the robot, be it sell, buy, exit or no signal. No signal is generated if price fluctuates in between the upper and lower envelope.
The Martingale EA Expert Advisor For MT4 – Exit Criteria
As the Martingale EA Expert Advisor does not set a stop loss and take profit to a trade, the robot monitors the trade on every tick. The trade can only be closed when the technical indicator provides a signal opposite to the direction of the current trade. This can be clearly explained by an example.
For instance, if the current trade is a buy and the envelope indicator gives a sell signal, the trade is forcibly closed whether the order profit is negative or positive. This is noticeable in testing. The expert advisor accepts a loss to preserve the capital. It relies on the accuracy of the trade signal and trade entry to make money for the trading account.
The expert advisor takes only one trade at a time. If the previous trade closed in profit, another trade is immediately executed without any time delay. However, if the previous trade was a loss, the next trade is entered after some delay. The time delay in the second case is not constant. It is not clear how the robot determines this time value.
The take profit is not a constant value or number of pips, so does the profit amount. The take profit amount can be big or small depending on the distance between the entry price and the upper or lower envelope when a new signal has been provided. For example, if the current trade is a buy and then price immediately accelerates to the upside and hits the upper envelope, the profit amount can be huge.
However, if price goes down a little before touching the upper envelope, the profit amount may be small because the close price is now closer to the entry price. In another instance, if price suddenly collapses to the downside after the buy entry and then touches the upper envelope after a while, the trade may end up as a loss because the close price is now below the open price. The same set of scenarios can happen to a sell trade.
The Martingale EA Expert Advisor For MT4 – Room for Improvement
During testing, the Martingale EA Expert Advisor was run for five months of historical data in EURUSD hourly chart. When testing ended, the robot managed to produce 13 percent of the account balance, which is remarkable, considering the testing was done with the default settings. Very few trades were taken by the robot throughout testing, that is, 18 trades, and 61 percent of these trades (or 11 trades) were profitable. This testing realized a profit factor of 2.52, which is outstanding.
One possible reason for this good performance is the use of a relatively big deviation percent (0.5 percent). The normal value is only 0.10 percent. With the 0.5 percent deviation, price appears to be caught up within the range of the upper and lower envelopes most of the time and then makes contact with the envelope just before making a price turn. Another reason could be the traded symbol itself. The program creator himself found that this expert advisor works best in EURUSD pair and such claim was supported by testing using a large amount of historical data.
When the trading system was run again in back tester this time using USDCAD and USDJPY still applied on the hourly chart, it failed to deliver the same excellent performance as it had with the EURUSD pair. This shows that the default settings might not be applicable to all trading instruments. Different sets of parameters must be used when the expert advisor is implemented in other markets. The only way to know which combination of settings is best for which pair and period is through back testing.