Reversals With Pin Bars 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 Reversals With Pin Bars Expert Advisor For MT4 is a sophisticated algorithmic trading system for MT4 platform. The name of the robot is a misnomer as the robot is not really used for taking reversal trades when pin bars form on the chart. On the contrary, the trading system follows the trend and takes trades in the direction of breakouts.
The robot performs a lot of calculations in the background not only for trade entry and exit. Similar to indicators, the expert advisor displays up and down arrows as well as trend lines above and below swing points. The arrows indicate that price has made short-term highs and lows. The trend lines connect two swing highs and two swing lows and are either pointing upward or downward.
The arrows being printed are fixed in place; however, old arrows are removed when new arrows come up. Only the recent 10 up arrows and 10 down arrows are kept. Meanwhile, trend lines repaint as price makes new highs or lows. Only one pair of trend lines is shown on the chart as the previous trend lines are being shifted to the right as new bars show up.
The Reversals With Pin Bars Expert Advisor For MT4 – Entry Criteria
The Reversals with Pin Bars Expert Advisor for MT4 performs complicated calculations at the beginning of a new candle when a tick comes in. First, it checks if the chart has more than 100 bars and if the take profit is more than 10 pips. Then it explores the free margin of the trading account if it can handle new trades. If these are not true, the robot will cease the operation, wait for a new candle to form and do another round of inspection.
The robot takes one type of order at a time. If the first trade is a buy, the succeeding trades are long trades too. It takes trades at the open of a new candle, and it can open up to 10 trades for the current symbol at one time. By default, it uses the lot size defined in Inputs (0.01 default). All trades taken have individual stop loss and take profit orders. The default stop loss is 20 pips, but the robot adds the spread to the stop loss distance, so the risk increases by the amount of the spread for the current symbol at the time of trade execution. On the other hand, the default take profit is 50 pips, but the robot subtracts the value of spread from the take profit distance, resulting in profits a spread lower than expected.
This trading system refers to the values of the trend lines it draws on the chart for trade direction. The trend line objects drawn are not used for divergence. Instead, they are used for determining market momentum. If the trend line channel is pointing upward, it means the current momentum is up, so the signal given is bullish. If the trend channel is pointing down, it suggests that the current momentum is to the downside, so a bearish signal is indicated.
The technical indicators in use and their settings are explained below:
- Momentum (14) – In this trading system the momentum indicator is not used for trend identification. Instead, it is used to confirm the signal obtained from trend lines. If the momentum value corresponding to any of the three previous candles is less than 0.3, the signal is confirmed. This means that the current market momentum still has enough strength to propel price forward whatever direction it pleases. The momentum values taken, however, are not applied to the current timeframe, but to the next lower timeframe. If the robot is attached to the 15-minute chart, for example, the values are obtained from the five-minute chart.
- Linear weighted moving averages (period 6 and 85, price typical) – These moving averages are applied to the next higher timeframe for the current candle. If the fast-moving LWMA (period 6) is above the slow-moving LWMA (period 85), this is a bullish signal. The opposite scenario will be taken as a sell signal.
The Reversals With Pin Bars Expert Advisor For MT4 – Exit Criteria
The Reversals with Pin Bars Expert Advisor for MT4 performs stop loss adjustment on every candle. Even if there are multiple trades of the same type currently open on the active symbol, the robot adjusts the stop loss of each trade individually, so trades are closed in different prices and times if price hits the stop loss.
The breakeven and trailing stop functions are enabled by default. These two functions benefit the trading account in two ways. First, profits are secured by not allowing winning trades to become losing trades. Second, trades are given more freedom to run for more profit as long as momentum in the trade direction remains.
The Reversals With Pin Bars Expert Advisor For MT4 – Room for Improvement
At the beginning of back testing, the Reversals with Pin Bars Expert Advisor for MT4 shows a very good performance. The trading account grows very quickly at first, but as testing time increases, the equity curve begins falling. The end result is a breakeven performance. This testing, though fairly limited in time scope, shows that the robot is not yet suitable for live trading; however, it shows potential as a trading system.
While the ratio between stop loss and take profit is around two, the slight deviation due to the spread factor throws the profitability of the trading system off balance. Another issue is the proximate distance between trades. As many as five open trades cluster together in a narrow price range spaced out at a minimum distance of one pip. This will lead to huge drawdowns and frequent liquidation of a group of trades.
Another related area to improve on is the addition of trades of the same type. It is best that another trade is added if the previous trade has been profitable and its stop loss has been moved to breakeven or better yet trailed. This way the addition of trades does not add risk to the account.
The program code looks old at the time of inspection. Some functions are available, but they are not used in trading operations. Also, there are variables defined in Inputs that are not used at all, such as the condition for equity stop and the accompanying risk percentage that will trigger the equity stop.