Self Optimizing RSI or MFI Trader 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:
- Self Optimizing RSI or MFI Trader Expert Advisor For MT4
- The Self Optimizing RSI or MFI Trader Expert Advisor For MT4 – Entry Criteria
- The Self Optimizing RSI or MFI Trader Expert Advisor For MT4 – Exit Criteria
- The Self Optimizing RSI or MFI Trader Expert Advisor For MT4 – Suggestion for Improvement
The Self Optimizing RSI or MFI Trader Expert Advisor For MT4 offers the user two options for trade entry, and the user can select only one option. The default option is the use of the money flow index (MFI) indicator, but the user can switch to RSI if he sees fit. Compared to RSI, the MFI is a less familiar indicator to traders.
The MFI measures the flow of money in and out of the market. In quantitative terms, the MFI is equal to the ratio of the positive money flow and the total money flow in a trading instrument. Similar to the RSI, the MFI can tell if a market enters a state of exhaustion and might be ready for a turn. This happens when price is overbought or oversold. In MetaTrader4, the default level for overbought is 80, and the oversold level is 20. The MFI can also be used for divergence trading. When price makes a new high or low but the MFI does not, a classic divergence has taken place and a quick price reversal might ensue.
The Self Optimizing RSI or MFI Trader Expert Advisor For MT4 – Entry Criteria
The Self Optimizing RSI or MFI Trader Expert Advisor is an advanced trading system and the user must be familiar with all available parameters in Inputs to trade it successfully. The parameters and their initial settings are presented below along with a detailed explanation.
- Magic = 4376 – The expert advisor assigns this number to each trade to be used later for trade management.
- UseDynamicLotSize = false – This condition can be true or false. When the default value of false is used, a consistent lot size is used throughout.
- Lots = 0.01 – If dynamic lot sizing is not selected, the lot size of all trades is 0.01.
- PercentageOfRisk = 2 – The user can set this value from 1 to 10, which represents the risk percentage for each trade in case the user enables dynamic lot sizing.
- Index = MFI – This object can be set to MFI or RSI. By default, MFI option is used. MFI refers to the money flow index indicator. Meanwhile, RSI means relative strength index.
- IndicatorTopValue = 80 – This is the oscillator level for both RSI and MFI where price is considered overbought.
- IndicatorBottomValue = 20 – This is the oscillator level for both RSI and MFI where price is said to be oversold.
- IndyTimeframe = PERIOD_CURRENT – This is the timeframe used for calculating the values of average true range, money flow index and relative strength index. The default value means the current period.
- IndyPeriods = 14 – This number refers to the number of periods used for computing the values of the ATR, MFI and RSI.
- IndyAppPrice = PRICE_CLOSE – This parameter is used in determining the RSI value. It means the computed value is applied to the close price of assets.
- iStoploss = 1000 – This number is in points and represents the nominal stop loss amount.
- iTakeprofit = 2000 – This number is in points and embodies the nominal take profit amount.
- Dynamic = true – By default, this parameter is true, meaning the take profit and stop loss vary per trade.
- StoplossMultiple = 2 – The actual stop loss price is obtained by multiplying the ATR by this factor.
- TakeProfitMultiple = 7 – The actual take profit price is obtained by multiplying the ATR by this number.
- UseBreakEven = true – When this condition is true, the stop loss of winning trades is moved to breakeven.
- Trigger = 200 – When the breakeven option above is true, the stop loss of a winning trade will be moved to breakeven when the trade has earned 200 points or 20 pips.
The expert advisor uses three technical indicators for different purposes. These indicators and their settings, along with their use, are explained below:
- Money flow index (period 14) – The standard MFI is used to find signals for trade entry. It is used on the current period and symbol, and the values are generated from the two previous candles. A buy signal is given if the previous MFI value is below 20 and the current MFI value is above 20. A sell signal is generated if the previous MFI is above 80 and the current MFI is below 80.
- Relative strength index (period 14, price close) – The standard RSI setting is used in this trading system. The indicator is applied on the current period and symbol, and values are obtained from the previous two bars. The buy or sell signal is generated in the same way as that for MFI.
- Average true range (period 14) – This is the standard setting for the ATR. In this trading system, the ATR is used for setting the stop loss and take profit. The ATR values are obtained from the previous candle of the current period and symbol.
By default, the lot size used throughout trading is 0.01 lot as defined in Inputs. If the option for dynamic lot sizing is selected, the lot size is computed using several factors, including the account balance, tick value and number of pips for the stop loss. This lot size can be way bigger than the fixed lot size if the trading account balance is large.
Obtaining the stop loss and take profit in each trade is a complicated process. First, the program considers the stop loss (100 pips) and take profit (200 pips) values set by the user in Inputs. Since a dynamic stop loss and take profit option is enabled by default, the value of the average true range is used in determining the take profit and stop loss prices.
To get the final stop loss value, the ATR is multiplied by 2, and to get the final take profit value, the ATR is multiplied by 7 (see the settings above). This is the reason why the values of the take profit and stop loss vary in every trade and these values seem unpredictable.
The Self Optimizing RSI or MFI Trader Expert Advisor For MT4 – Exit Criteria
The Self Optimizing RSI or MFI Trader Expert Advisor takes only one trade at a time. There are two possible ways that a trade can be closed, that is, by the stop loss or take profit. Throughout trading, the take profit is not altered by the robot. Only the stop loss is modified, and it is done only once. This happens when a trade is winning and a certain scenario occurs.
A sample buy trade will be used to explain how the stop loss is adjusted. If the buy trade has gained 20 pips (see Trigger option above) plus the stop level of the current symbol, its stop loss will be moved to breakeven. A sell trade is handled in the same manner. After the trade is adjusted this way, the robot does not adjust the stop loss again. After this point, the trade can be closed only when price goes to take profit or goes back to breakeven. In either case, the trade will not lose money.
The Self Optimizing RSI or MFI Trader Expert Advisor For MT4 – Suggestion for Improvement
The Self Optimizing RSI or MFI Trader Expert Advisor was tested to determine its profitability. Unfortunately, it did not return profits in back testing using seven months of data. The profit factor was below one, and the win rate was only 34 percent. The only positive metric was the low maximal drawdown (less than one percent). This means that this expert advisor is not ready yet for live trading.