Simple Candle Filter Martingale 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:
- Simple Candle Filter Martingale Expert Advisor For MT4
- The Simple Candle Filter Martingale Expert Advisor For MT4 – Entry Criteria
- The Simple Candle Filter Martingale Expert Advisor For MT4 – Exit Criteria
- The Simple Candle Filter Martingale Expert Advisor For MT4 – Suggestion for Improvement
The Simple Candle Filter Martingale Expert Advisor is a simple trading system that uses a simple entry method and martingale lot sizing in an effort to extract profits from the markets. This expert advisor trades in one direction only (i.e., buy position), and the entry is triggered by the range of the current candle. If the current candle forming in the current timeframe registers a specific number of pips from the open price to the current close price, a trade is initiated right away with stop loss and take profit targets.
Running the expert advisor in back test for a period of five months using one symbol and one period yielded a positive result. While most types of martingale trading systems subject the trading account to large drawdowns and elevated risks, this trading robot displays a minimal drawdown with moderate gains. While this testing result is limited in duration, it can give interested users an idea that this trading system has a potential to produce profits.
The Simple Candle Filter Martingale Expert Advisor For MT4 – Entry Criteria
The Simple Candle Filter Martingale Expert Advisor for Metatrader4 uses one criterion when identifying a trade opportunity. It does not use any technical indicator to define the trend and time the trade entry. As the name implies, this expert advisor makes use of a simple candle filter to take trades.
There are very few parameters that the user needs to tweak in Inputs. The parameters, their default values and descriptions are presented below:
- MagicStart = 4779 – All trades taken by this expert advisor will have this unique identifier to differentiate them from other trades taken by other expert advisors on the same trading account.
- inp1_mmMgMultiplyOnLoss = 2.0 – This figure is the multiplier of trade volume for subsequent trades taken by the robot. The default value of 2.0 means that the lot size of the previous trade is doubled to get the lot size of the next trade. This makes the trading system a martingale strategy.
- inp1_StopLossPips = 50.0 – Each trade initiated by the robot has a stop loss of 50 pips.
- inp1_TakeProfitPips = 50.0 – Each trade executed by the expert advisor will have a take profit of 50 pips.
- inp3_MinBodySize = 5.0 – This value is a filter for taking trades. The expert advisor will initiate a trade if the range of the current candle reaches five pips. The higher the value, the better.
This expert advisor only takes buy trades. At any point in the process of the current candle’s development, the expert advisor may execute the trade the moment the range of the candle reaches five pips (by default). The candle range is not computed by subtracting the low price from the high price. Instead, the range is measured from the open price to the current close price.
The trading system uses the minimum lot size set by the broker for the current trading account. Normally, the minimum lot size is 0.01 in most brokers. The initial lot size is automatically generated by the expert advisor, and it is not available as an adjustable option in the expert settings. Each trade comes with a take profit and stop loss, which are set in place the time the robot sends a trade request to the server. By default, the stop loss is 50 pips, and the take profit is 50 pips, which is an even risk-reward ratio.
The Simple Candle Filter Martingale Expert Advisor For MT4 – Exit Criteria
When a trade has been executed, the Simple Candle Filter Martingale Expert Advisor does not look for and initiate additional trades. Only one trade is taken at a time. As the robot does not actively manage open trades, each trade is decided either as a loser or a winner. It becomes a loser if the stop loss is hit, and it turns out a winner if price hits the take profit.
If the previous trade ended in loss, the martingale position sizing comes in. The expert advisor determines the trade volume of the previous trade and multiplies it by two to get the next trade volume. Again, the robot does not look after the outcome of this trade. It allows the market to dictate the result of the trade entry. If the current trade lost again, the current lot size is taken and doubled to be used in the next trade.
When a scenario opposite to the foregoing has occurred, that is, the previous trade turned out to be a winner, the expert advisor resets the lot size to the minimum lot size and uses it in the next trade. If the expert advisor suffers a string of losses, the trade volume continually gets doubled until hopefully a winning trade comes along. It takes only one winning trade to erase the losses in the previous losing trades and realize a good profit.
The Simple Candle Filter Martingale Expert Advisor For MT4 – Suggestion for Improvement
The Simple Candle Filter Martingale Expert Advisor for MetaTrader4 is a promising algorithmic trading system for MT4 trading platform. While it uses a simplistic approach to trade entry, the expert advisor is able to generate profits with minimal drawdown. The equity curve looks profitable overall with very few bumps along the way.
The maximal drawdown experienced by the trading account during the five months of testing was only two percent. This type of drawdown is not common for automated trading systems using the martingale strategy. It is amazing to note that the robot managed to win a little more than 50 percent of all trades taken during the test period, but it returned a hefty amount of profit regardless.
There is not much to improve in the algorithm of this trading system. What is left to be done is that the user conducts his own testing to confirm the profitability of this expert advisor. It is advised that the user runs the robot in longer periods of time using historical price data of various trading instruments and different timeframes, although the program creator designed the robot for use in USDJPY trading instrument and four-hour timeframe.
Another testing was done to see how the expert advisor fares in the symbol and period suggested by the program coder. This is to check if the robot performs better in the recommended market. Because the four-hour period is used in this testing, the robot only takes fewer trades, but the net profit is still positive. Maximum drawdown is a little better (i.e., less than two percent), and the win rate is lower (36 percent). Despite the lower win rate, the robot still made money as it takes only one winning trade for the robot to cover previous losses in a trade cycle.
The first round of testing yielded more profits because the timeframe used was 15 minutes; therefore, the robot took more trades (four times higher) than the second round. While these rounds of testing were positive for the trading system, it is prudent for users to conduct more testing, preferably using the advanced optimization function, to determine the combination of parameters that will yield the most profits.
If the user employs optimization when conducting testing, it is best to rerun the results with the most profitable settings to find out if the good results are replicated in testing without optimization. If the user is confident with the test results, he can subject the robot to forward testing using live market data. If the robot continues to deliver good results in demo trading after some time, that is the time to consider using the robot in live trading.