Scalping With Virtual Pending Orders 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:
- Scalping With Virtual Pending Orders Expert Advisor For MT4
- Scalping With Virtual Pending Orders Expert Advisor For MT4 – Entry Criteria
- Scalping With Virtual Pending Orders Expert Advisor For MT4 – Exit Criteria
- Scalping With Virtual Pending Orders Expert Advisor For MT4 – Rooms for Improvement
Scalping With Virtual Pending Orders Expert Advisor For MT4 (hereinafter called VPO) is a highly sophisticated expert advisor due to its use of multiple triggers and confirmation tools before placing a trade order. VPO works only on EURUSD pair and on one-minute chart.
In contrast with other scalpers, this robot trades quite rarely as it requires several conditions to exist simultaneously before it executes an order. Plus, only one trade is taken at a time. As the name implies, VPO sets virtual prices above or below market price at the touch of which a market order is executed. The robot runs at the open of each new candle to check for trade conditions.
Scalping With Virtual Pending Orders Expert Advisor For MT4 – Entry Criteria
Trades might not be taken if an important setting is overlooked. The default maximum spread (i.e. Spread_Max) is only 0.5 pips. If the user happens to be using a broker with a spread for EURUSD higher than 0.5 pips, he might not see any trades taken. That is why the user must adjust this setting to a spread higher than the normal range of spread in his broker.
VPO uses the following indicators and settings:
- Simple Moving Averages (period 2; period 34) – At the open of a new candle, the robot gets the difference of SMA (2) and SMA (34) of the previous candle to determine the trade bias (i.e. buy or sell). This is also used as one trade consideration. If this difference is greater than 3 pips (default value) and SMA (2) is above SMA (34), it is one trigger for a buy entry. The opposite scenario is one trigger for a sell entry.
- Volume – The average value of the volumes of the three previous candles is determined to see if it reaches a threshold value of 90 (default). This is another trade consideration. The user can change this value as he so desires.
- Bollinger Bands (period 20) – The robot takes the difference between the values of the upper band and the lower band and then evaluates if that value is greater than 8 pips but less than 27 pips. This is another trade filter. It is not necessary that this indicator is placed on the chart as the robot only takes the gap of the upper and lower bands and not a breakout thereof.
- Stochastic (7,3,7) – A cross above the 28 level by the main line is a buy trigger, while a cross below the 72 level is a sell trigger.
In addition to the indicators and their requirements outlined above, VPO also checks the range of the previous candle to see if it is less than a certain value. The default maximum value is 5 pips. A potential buy trade is valid if the range between the high and open prices is less than 5 pips. Meanwhile, a potential sell trade is valid if the range between the open and low prices is less than 5 pips.
VPO also factors the time and day of the week into the equation. Trades are allowed from Monday until Thursday from 4:00 AM until 10:00 PM server time. On Fridays, trading is possible only from 4:00 AM until 10:00 AM server time.
If all of the above criteria are met and the robot has no open buy or sell order, VPO will get the price 2 pips above the current ask price for a buy trade or 2 pips below the current bid price for a sell trade as a virtual pending order price level. If the market touches this level, the virtual pending order is converted to a buy or sell trade.
Scalping With Virtual Pending Orders Expert Advisor For MT4 – Exit Criteria
Once a market order is executed, the stop loss is set at a distance of 5 pips and the take profit is placed at a distance of 12 pips by default. The trade thus placed will be closed by the robot, whether gaining or losing at the discretion of the user, when the trade reaches a time limit. The default time limit is 25 minutes from the time of trade execution.
When the trade has become profitable and the user sets the TrailingStop variable to a value higher than zero, the robot will move the stop loss to a price at a TrailingStop distance from the current price. However, VPO will only manage the trade in this manner if the user adjusts the TrailingStop value from the default zero value.
Scalping With Virtual Pending Orders Expert Advisor For MT4 – Rooms for Improvement
The robot takes relatively few trades when measured against its run time. This is because it is designed with multiple and strict entry requirements. However, this is not suitable for an expert advisor categorized as a scalper. As a workaround, the user can loosen one or two triggers, but not more, in order to preserve its profitability. This plan of action makes sense as long as the reward-risk ratio is favorable for the trader, meaning the trade gains more pips when it wins and loses few pips when losing.
One way to increase trades is to shorten the period of the slow-moving average from 34 (default) to any value determined through back testing or chart analysis. Another way is to look at the strategy as a trend following system. As such, the robot must only take buy trades when the stochastics reads oversold while price is trending higher or sell trades when stochastics is overbought while the trend is bearish. Coupled with a good risk-reward ratio, increasing the number of trades this way might make the robot more profitable.
Another downside to this robot is how it adjusts the stop loss and take profit from those set by the user. For the stop loss, the robot adds the current spread, increasing the trade risk. For the take profit, the robot subtracts the spread, making the trade less profitable. This can be resolved by taking the actual order’s open price and then adding and subtracting the stop loss and take profit values in pips without regard to the spread. Still, the current setting would not be a problem if the user trades at a broker with tight spreads.