Trend Catcher 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 Trend Catcher Expert Advisor For MT4 is a fairly sophisticated trading system for MetaTrader4. Trading with the default settings makes the robot a full martingale trading system as it doubles the lot size of the next trade and the subsequent trades in case the previous trade resulted in a loss. However, the user has the option to nullify the martingale lot sizing altogether by setting the lot factor to 1.0 in Inputs.
The expert advisor performed poorly when run in the strategy tester using five months of historical price data. The maximal drawdown was high (60 percent), and the trading account lost some money. Testing was done using a lot factor of 1.5 and risk factor of 1.0. When the default settings of 2.0 lot factor and 2.0 risk factor were used, the trading account suffered heavy beating. Therefore, users must conduct thorough and longer testing to determine the best settings that will yield positive results.
The Trend Catcher Expert Advisor For MT4 – Entry Criteria
The Trend Catcher Expert Advisor for MT4 opens a new trade whenever an opportunity exists without waiting for a new candle to form. Trades are executed in real time when a tick comes in. When the trading system is first dropped on the chart, the user might be overwhelmed with the number of parameters to make sense of at the get-go. To make the experience less stressful for the user, the most important parameters are explained in more detail below:
- Auto_SL = true – This parameter must be set to true if automatic lot sizing is desired.
- minSL = 10 – If the distance between market price and parabolic SAR is less than this value, the robot will not take a trade.
- maxSL = 200 – If the distance between market price and parabolic SAR is greater than this value, the robot will not execute a trade.
- SL = 20 – This is the stop loss distance in pips.
- TP = 200 – This is the take profit distance in points (equal to a tenth of a pip).
- Risk = 2 – This is the percentage of the account balance at risk on every trade.
- Martin = true – If this is set to true, the robot will multiply the lot size of the previous trade with a certain factor to come up with the lot size for the next trade.
- Koef = 2 – This is the factor being multiplied to the lot size of the previous trade to get the new lot size.
The expert advisor utilizes an array of technical indicators to select which side of the market to trade and when it is time to enter the market. The different indicators being used, their settings and manner of use are described below:
- Parabolic SAR (step 0.004, maximum 0.2, bar 0) – This is not the standard setting for the parabolic SAR. Here the parabolic SAR is applied to the current timeframe and candle. The parabolic SAR value is subtracted to or from the current market price to get the actual stop loss distance that goes into the lot size calculation. The lot size so obtained is applied to the first trade in a trade cycle in case multiple trades are taken.
- Moving averages (periods 200, 50 and 25; simple mode; price close) – These three simple moving averages are applied to the current timeframe and current candle. A buy signal would be generated if 50 SMA is greater than 200 SMA and the current ask price is greater than 25 SMA. A sell signal is given if the 50 SMA is less than 200 SMA and the current bid price is less than 25 SMA.
If the indicators above give one specific signal (buy or sell), a trade will be taken if the current day falls on a trading day. By default, every day (from Monday to Friday) is a trading day unless the user makes an adjustment. The user has full control as to the days in the week to trade this trading system.
The lot size of each trade varies by the account balance and the relative distance between the market price and the parabolic SAR. In normal conditions wherein the account has enough free margin, the lot size is obtained by multiplying the account balance with the risk percentage defined in Inputs (default is 2.0), dividing the result by the distance between market price and the parabolic SAR, and finally multiplying the result with the tick value of the underlying asset.
The result of the above calculation is the initial lot size for each trade cycle. The succeeding lot sizes are multiples of the previous trade’s lot size. For example, if the previous trade has a lot size of 0.50 and the martingale factor is 2 (default), then the next trade will have a lot size of 1.0.
The Trend Catcher Expert Advisor For MT4 – Exit Criteria
The Trend Catcher Expert Advisor for MT4 employs a passive approach to trade management. It relies on the market to do the talking when it comes to closing trades. It does not use breakeven or trail stop functions to secure winning trades. Once a trade is live, it will remain open until price hits either the stop loss or take profit.
As a martingale trading strategy, the expert advisor increases the lot size on the next trade in case the previous trade was a loss. The default lot size multiplier is two, making the robot a full martingale system. However, the trader has the option to lower the multiplier to, say 1.5, to reduce the risk on every trade or even use a multiplier of 1.0 to disable the martingale completely.
When the previous trade lost, the lot sizes of the succeeding trades are incremented until the robot wins at which point all the losses are completely recovered with some profit booked. It takes just one winning trade to bring the account back to normal. However, if the string of losses continues, the whole account can be wiped out in an instant. That is the risk inherent to all martingale trading strategies, manual or automated.
If a trade wins, on the other hand, the lot size for the next trade will increase not because of martingale but because the account balance has grown. In this case the increase in lot size is minimal when compared to a trade whose predecessor was a loser. This strategy ensures that the potential profit on every trade goes up and down as the account balance grows and shrinks.
The Trend Catcher Expert Advisor For MT4 – Room for Improvement
Further improvement is needed to make the Trend Catcher Expert Advisor for MT4 a profitable trading system. Clearly, trading with the default settings will lead to capital erosion as the robot assigns too high of a lot size to any trade regardless of account balance. While it has the potential to grow the account balance dramatically in a short period of time, the risk it poses to the trading account might be too much for any serious investor to even consider.
Testing with optimization is one strategy that any interested user may take to explore the capability of the robot to generate profits. Once the robot starts to show positive results in optimized testing, the settings that lead to most profits should be tested again without optimization. Once the trader sees consistent back testing results, he can already begin forward testing in a demo account to see how the robot fares in live market environment. This is how the trader builds confidence in using a trading system.