Robot ADX With 2 MA 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 Robot ADX With 2 MA Expert Advisor For MT4 is an expert advisor that employs the average directional movement index (ADX) and two exponential moving averages for trade direction and entry timing. The robot is fairly simple in its design and straightforward in its approach to trading. Once a trade direction is identified with the use of the two technical indicators, a trade is taken with stop loss and take profit orders and left to run until either of the stop orders is triggered.
This robot is intended to take advantage of market trends. The moving average is widely known as a momentum and trend indicator, while the ADX gauges the strength of market movement. In theory, the combination of these two line studies is perfect as the first determines trend direction while the second confirms the trade entry. With good run time, the system should generate profits for the investor.
The Robot ADX With 2 MA Expert Advisor For MT4 – Entry Criteria
The robot looks for trade entries on every tick. Before a trade is taken, initial checks are done by the robot. The MT4 platform is checked if the setting for automated trading is enabled, if the programmed is not used for testing in the strategy tester, and if the program execution is not forcibly terminated by the terminal. Also, the account margin is checked to see if the trading account has enough money to open new orders. Once the result of all the checks is affirmative, the robot will read the values of the indicators for possible entries.
As already pointed out, the indicators used and their settings are presented in more detail below:
- Exponential moving averages (period 5 and 12) – This is the primary indicator used by the robot. The relative placement of the two lines on the chart will tell whether the trade direction is long or short. If the 5 EMA is above the 12 EMA on the previous candle, the signal is bullish, while if the 5 EMA is below the 12 EMA, a bearish signal is generated. For a valid signal, the distance between the two EMAs should be more than 10 points or one pip, which is a fairly loose requirement.
- ADX (6) – This indicator is used to confirm the trade entry suggested by the moving averages. For a buy trade, three conditions must be met. Positive DI should be below 5 on the previous candle and above 10 on the current candle. Plus, positive DI should be above the negative DI on the current candle. For a sell trade, negative DI on the previous candle should be below 5 and above 10 on the current candle. In addition, positive DI should be below the negative DI on the current candle.
Once the two requirements above are satisfied, the robot will open one trade (buy or sell). It will run one trade at a time, putting it in the category of trading systems for swing trading.
The Robot ADX With 2 MA Expert Advisor For MT4 – Exit Criteria
Trades opened using the Robot ADX with 2 MA Expert Advisor for MT4 always have stop loss and take profit. The default stop loss is 2400 points (or 240 pips), and the default take profit is 4700 points (470 pips). This is close to a risk-reward ratio of 2, which is sound money management strategy.
The trade will remain open until price hits either one of the stop orders. Since the stop loss and take profit targets are significantly high, the trade might be open for days or weeks depending on market volatility. The user has the option to lower the stop orders if the robot is to take more trades.
The Robot ADX With 2 MA Expert Advisor For MT4 – Rooms for Improvement
The Robot ADX with 2 MA Expert Advisor for MT4 has a lot of room for improvement. First, the function that sends orders to the trade server should be modified to make separate requests for buy and sell orders. This is to avoid errors in order placement. Next, the variables for ADX levels (default 5 and 10) are hard coded, leaving no room for the user to test and find the best settings. This is also not good for back testing and optimization. The variables should be put as options in the Inputs tab.
The robot uses the positive DI for identifying bullish signals and negative DI for determining bearish signals. This use of the ADX is inaccurate. The best strategy is to use the crossovers of +DI and -DI. When +DI crosses above -DI, this is a buy signal, and when -DI crosses below +DI, this is a sell signal. The slope of either +DI or -DI is not reliable as an indication of market direction, but crossover does.
An OrderSend function in the block of code dedicated for sell trades might be misplaced, as there is no counterpart buy ordersend function in the block of code for buys. As a result, the trade opens sell orders only in the strategy tester. Removing that function does not solve the problem, though, because no trade would be taken as a result of this action. This could be a bug that the program developer must troubleshoot.
Also, the robot uses the ExitPosition function not for managing open trades, but only for closing trades in response to errors of some type. Using such function for this purpose is a misuse of coding space. Trades do not have to be closed due to unrelated errors.
Running the robot in the strategy tester shows an equity curve that is going downhill from beginning to end. Clearly, the robot is not suitable for demo trading, much less live trading, as it stands at the moment. Improvements must be done in trade entry, trade management, setting stop loss and take profit targets, and fixing coding bugs. A makeover of the basic logic of the robot must be done to see a better-performing expert advisor worthy of the traders and investors’ time and money. All this suggests that the robot was created by a neophyte programmer in MQL4 with limited knowledge of technical indicators and inadequate live trading experience.