Proper Bot 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!
The Proper Bot Expert Advisor For MT4 uses a different kind of martingale strategy in combination with technical indicators to make money in trading the foreign exchange market. This expert advisor does not entirely employ a full martingale approach when computing for the trade volume. To reduce trading risk and survive large drawdowns, it utilizes a relatively smaller multiplier (1.1 in place of 2) instead. However, any trading system that increments the position size belongs to the martingale category regardless.
When run in the strategy tester for a relatively short period of time, the expert advisor managed to survive the odds and return profits. While the amount of profit gained was significant, it came with a large drawdown notwithstanding. The maximal drawdown was more than 50 percent, which is not acceptable to any serious trader or investor. This robot needs improvement programmatically to address the heavy drawdown. Martingale systems normally produce profits at the expense of drawdown. Therefore, interested users must do further confirmatory testing and only use this trading system in trading after doing a careful risk analysis.
The Proper Bot Expert Advisor For MT4 – Entry Criteria
The Proper Bot Expert Advisor takes advantage of the market tendency to return to the mean after making a move in one direction. As observed, price always touches a moving average even if it moves strongly in any direction. This expert advisor capitalizes on this mean reversion anomaly of price to generate profits. Just a small pullback in price is necessary to achieve this goal.
This expert advisor provides the user with plenty of variables to work with to influence the workings of the robot. The user must fully understand how these variables affect the trading system before making any changes. An explanation about the purpose and values of the external variables is given below:
- MA_Fast_Period = 10 – The period of the fast-moving average is 10.
- MA_Mid_Period = 25 – The period of the slower-moving average is 25.
- MA_Slow_Period = 50 – The period of the slow-moving average is 50.
- Volume_Minimum = 69 – This is the required minimum volume for the previous candle so that trading can commence.
- Volume_Period = 1 – The name of the variable is a misnomer. This parameter is not used as a period per se as in the case of moving averages; rather, it is the candle number or bar shift from the current candle.
- High_Level = 1.50001 – The expert advisor will not open buy trades on or above this price level.
- Low_Level = 1.40001 – The robot will not open sell trades on or below this price level.
- First_Lot = 0.08 – The first trade has a lot size of 0.08. The user can adjust this value at his disposal.
- Take_Profit = 10000 – The take profit of all trades is set 10,000 points (or 1,000 pips) from the entry price.
- Stop_Loss = 30000 – The stop loss of all trades is set 30,000 points (or 3,000 pips) from the entry price.
- Slippage = 20 – If the user keeps this value, the maximum slippage for trade execution is 20 points, or 2 pips.
- Start_Hour = 6 – This is the start hour of trading on each day.
- Start_Minute = 0 – This is the start minute from the start hour when trading commences.
- Finish_Hour = 21 – This is the end hour of trading on each day.
- Finish_Minute = 0 – This is the end minute from the end hour when trading stops.
- Trail_Start = 52 – This value is expressed points. This means a trade must gain at least 52 points, or 5.2 pips, to trigger the trailing stop function.
- Trail_Step = 2 – When trailing stop has started, stop loss adjustment is done on every 2 points of price movement in the direction of the trade.
- Magic_Number = 2013 – This figure is attached by the expert advisor to each trade to make trade management easy.
The expert advisor makes use of some technical indicators to determine the direction of the first trade. The goal is to avoid the scenario where too many trades are taken on the wrong side of the market, putting the trading capital in jeopardy. If possible, the robot should take a couple of trades only in every cycle. The technical indicators used are discussed below:
- Moving averages (period 10, 25 and 50; exponential method; price close) – The values of the exponential moving averages are generated from the previous candle on the current timeframe and symbol. When the three moving averages are aligned, a trade signal is generated. If the 10 EMA is above the 25 EMA and the 25 EMA is above the 50 EMA, a signal for buy entry is produced. On the other hand, if the 10 EMA is below the 25 EMA and the 25 EMA is below the 50 EMA, a signal for sell entry is given.
- Volume – The tick volume of the previous candle on the current chart and symbol is determined and compared with the minimum value defined in Inputs. If the volume is equal to or greater than 69, a trade entry will be taken. If the user changes the timeframe where the expert advisor is attached, the volume is applied to the new timeframe.
As defined in Inputs, the first trade in a trade cycle comes in a lot size of 0.08, which might be big or small depending on the account size. After the trade is executed, the stop loss and take profit are immediately added by the expert advisor. Each trade has a stop loss of 3,000 pips and a take profit of 1,000 pips, which might be impossible for price to reach over the short term.
The Proper Bot Expert Advisor For MT4 – Exit Criteria
The Proper Bot Expert Advisor can open as many trades as possible if the situation permits. For example, if the first trade is a buy and price plunges, one trade is added on every 10 pips of movement against the previous trade. This will continue until price reverses and closes all open trades in profit or when the trading account can no longer accommodate new trades, at which point the account reaches a margin call. In one instance in testing, the robot opened a total of 26 buy trades in one trading cycle before the market reverses to close all trades in profit.
This trading system uses a multiplier of 1.1 when defining the position size of the next trade. This means that the position size increases as more trades are taken. The advantage is that the robot requires not much pullback before closing all trades in profit when compared to using the same position size for all trades. Another advantage is that the multiplier is way lower than 2, which is standard for the martingale system.
The Proper Bot Expert Advisor For MT4 – Room for Improvement
The Proper Bot Expert Advisor produced a sizable amount of profit when run in the strategy tester over a period of five months of historical data. However, this huge profit brought peril to the trading account. Since capital preservation is more important than gain, the performance of the trading system in testing is not acceptable.
The robot can be improved in many respects. First, setting take profit and stop loss values that are not reachable serves no use, so not putting these values is actually better. Also, it is a good idea to put the grid size and the lot multiplier as external variables so that users can make good use of them in testing. Specifying the maximum number of trades or maximum lot amount in Inputs can help control account drawdown.