Smart AC 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:
- Smart AC Trader Expert Advisor For MT4
- The Smart AC Trader Expert Advisor For MT4 – Entry Criteria
- The Smart AC Trader Expert Advisor For MT4 – Exit Criteria
- The Smart AC Trader Expert Advisor For MT4 – Room for Improvement
The Smart AC Trader Expert Advisor is an ordinary moving average crossover trading system. It is designed for use in MetaTrader4 trading platform. Due to the minimal take profit target, this expert advisor can be considered a scalping system. As such, it can be used even in lower timeframes such as one-minute, five-minute and 15-minute timeframes. This trading robot supports either a four-digit or five-digit foreign exchange broker.
The user must be aware that this trading system is not yet ready for live trading. It failed to generate profits in the strategy tester. Therefore, anyone interested to use this robot in trading must do his own testing until he finds the settings that yield positive results. The fastest way to do this is by utilizing the optimization feature of back tester. Once the user finds the profitable settings, he must run the tester again without optimization. This is to confirm the results using a slower mode of testing.
The Smart AC Trader Expert Advisor For MT4 – Entry Criteria
The Smart AC Trader Expert Advisor runs the main functions related to trade entry and trade management on every candle. When a new bar has formed, the robot checks if there are more than 100 bars on the chart, if automated trading is allowed, if there is no open order yet in the active symbol, and if there is still free margin for opening new trades. If the results of these checks are positive, the program moves forward.
The trader is presented with several options to adjust as necessary in Inputs when the expert advisor is first applied on the chart. He can view and modify any of these options at any time by clicking the smile icon of the robot on the upper-right corner of the chart or by pressing F7 on the keyboard. The most important options are discussed below:
- USEMOVETOBREAKEVEN = true – This variable can be set to true or false. When true, winning trades will be secured by moving the stop loss to breakeven.
- WHENTOMOVETOBE = 10 – When a trade gains 10 pips, its stop loss will be moved to the entry price to secure the trade.
- IncreaseFactor = 0.001 – If this value is greater than or equal to the minimum lot size in the trading account (normally 0.01), the lot size of the next trade will be increased by this amount if the previous trade resulted in a loss.
- Lotsize = 0.01 – Each trade has a trade volume of 0.01.
- Double_Lotsize = false – If this parameter is true, the expert advisor will take the lot size of the previous trade and double it to arrive at the lot size of the next trade.
- TrailingStop = 30 – If a trade earns 30 pips, its stop loss will be trailed to lock in more profits.
- Stop_Loss = 5 – The nominal stop loss of each trade is five pips.
- Take_Profit = 5 – The nominal take profit for each trade is five pips.
- FastMA = 1 – A fast-moving average is used with a period of one.
- SlowMA = 5 – A slow-moving average is used with a period of five.
- Mom_Sell = 0.3 – The momentum indicator must have a value of less than 0.3 so that a sell trade signal is valid.
- Mom_Buy = 0.3 – The momentum value must be less than 0.3 for a buy trade signal to be validated.
- MagicNumber = 562148 – The trades taken by the expert advisor are identified by this magic number.
- Start = 0 – The start hour of trading is hour zero server time.
- End = 24 – The end hour of trading is hour 24 server time.
A couple of technical indicators is used by the expert advisor in generating a trade signal. The indicators used, their settings and how the signal is interpreted are presented below:
- Moving average (period 1 and 5, linear weighted average, typical price) – A pair of moving averages is used to determine the trend on the next lower timeframe of the current symbol and so define the direction of trade entry. If the 1 LWMA is greater than the 5 LWMA for the current candle, the trend is up. If the 1 LWMA is less than the 5 LWMA for the current bar, the trend is down.
- Momentum (period 14, close price) – This indicator is used only to confirm the signal given by the moving averages. Momentum values are obtained from the three previous candles of the next higher period of the current symbol. At least one of these values must be less than 0.3 to confirm the trade signal.
When the moving average combination gives an entry signal and the momentum indicator confirms the signal, the expert advisor executes a trade with a trade volume of 0.01 and with stop loss and take profit values. The stop loss is set five pips from entry price, and the take profit is set five pips from open price. Five pips are only the nominal stop loss and take profit. The actual values vary by the amount of the spread. The spread is added to the stop loss, making the trade riskier, and deducted from the take profit, making the trade less profitable.
The Smart AC Trader Expert Advisor For MT4 – Exit Criteria
The Smart AC Trader Expert Advisor takes only one trade at a time. As shown in the listed external variables, while it appears that breakeven and trail functionalities are available, stop loss adjustment did not happen at any time during testing. Trades are closed by the take profit and stop loss only.
The Smart AC Trader Expert Advisor For MT4 – Room for Improvement
The performance of the Smart AC Trader Expert Advisor in back testing does not look inviting at present. Five months of historical data are used in this testing, but the robot started taking trades very late. This means that the robot did not really run for five months. When testing began, the trading result was already predictable. The equity curve was sloping downward continuously from beginning to end. Maximum drawdown was three percent. Although the win rate was 51 percent, the robot did not generate profits, and the profit factor was only 0.45.
It is surprising to find out that the win percentage was greater than 50 percent, but the trading system failed to deliver results. One main factor to this poor performance is the unfavorable risk to reward ratio. When the spread is factored into the stop loss and take profit in the manner discussed in this article, the balance of profitability was titled in favor of risk. When a trade wins, the account will gain a little amount, but when a trade loses, the account will loss a bigger amount. This shows that the trader using this trading system is not primed for success at the get-go. Therefore, the user must find the best relationship of stop loss and take profit that will yield positive results.
In continuation with the above discussion, to improve the performance of this trading system, the default values for stop loss and take profit must be changed. The default values of five pips render the breakeven and trailing functions useless. As defined in Inputs, trades break even at 10 pips and are trailed beginning at 30 pips. This explains why the trades in testing did not experience modification of stop loss. Therefore, further testing using months or years of historical data must be done by the user. Also, testing must be done in different symbols and periods.