Volatility Trader and Breakout 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 Volatility Trader and Breakout Expert Advisor For MT4 is a complex algorithmic trading system developed for MT4 platform. This robot is mainly a breakout trading system as it initiates orders when price breaks the upper or lower channel of a custom indicator known as Keltner channel. The concept of volatility is being used in the sense that breakout is applied on the current candle, which is still in the process of completion and can change direction very quickly.
This trading system is suitable for use by intermediate and advanced traders as users have several parameters to look into or adjust in Inputs when the robot is first attached to the chart. Beginner traders might be overwhelmed by the sheer number of variables to begin with. In addition, the robot does not yield a positive result in the strategy tester at the time of this writing, although it appears to have been programmed quite perfectly. Therefore, interested traders must run a test of this trading system in both demo trading and back test to be able to determine its profitability.
The Volatility Trader and Breakout Expert Advisor For MT4 – Entry Criteria
The Volatility Trader and Breakout Expert Advisor for MT4 looks for trade opportunities on every tick. Prior to looking for trade entries, it gathers some basic market information to be used in trade generation later. It also considers the parameters set by the user in Inputs. After the preliminary run, the robot is ready to hunt for trades.
The robot uses two technical indicators in generating trade signals. The indicators, their settings, and the way they are used in this trading system are explained below:
- Moving average (period 3, linear weighted) – The moving average is the primary indicator for trend direction. The value being used for calculation is for the current candle of the active timeframe. If the close of the current candle in the active timeframe is below the moving average, that is taken as a sell signal. If the close of the current candle in the current timeframe is above the moving average, it is taken as a buy signal.
- Keltner channel (period 10) – This indicator is not a built-in MT4 indicator, but it is widely available for download anywhere online. To use it in the trading algorithm, the indicator must be placed in the Indicators folder and the robot will read its value using the iCustom function. The values needed in the program are the upper and lower channels for the current open candle. If the close of the current candle is below the lower channel, that is taken as a sell signal. If the close of the current candle is above the upper channel, it is taken as a buy signal.
When the robot is run for the first time, it opens the first trade in the following manner. If there is no open trade in the current symbol, the robot will immediately take a trade whose direction is determined by the signal obtained from the moving average and Keltner channel. If this trade turns out to be a loser, the robot will stop trading and wait for the next opportunity. However, if the trade is closed in profit, the next trade will be of the same type as the recently closed trade. If this is the case, the robot will use a pending order for the next trade right after the previous trade has been closed.
In continuation, if the previous winning trade is a sell, the robot will put a sell stop five pips below the current bid price. If the market price moves up, the sell stop will follow suit, maintaining a distance of five pips from the bid price. After some time, price will touch the sell stop, which will be converted to a market order. Shortly after, a stop loss of 30 pips will be attached to the sell order. After a new tick, the stop loss is adjusted to a price five pips above the entry price. Then the trailing stop function takes over.
The Volatility Trader and Breakout Expert Advisor For MT4 – Exit Criteria
Trades taken by the Volatility Trader and Breakout Expert Advisor for MT4 have varying lot sizes as automatic lot size calculation is enabled by default. This will be the case even if the user indicates a value in the lot size parameter in Inputs. The lot size goes up and down as the account balance grows and shrinks. When a trade is first executed, it does not bear any stop loss or take profit, but shortly after as already mentioned, a stop loss is added to the trade. A take profit stop order is not used at all.
The trading robot actively manages open trades. Every pip of movement or every point of movement, to be more accurate, is being acted upon. As price moves in favor of the trade, stop loss is adjusted point by point until the market performs a reality check. That is, the market closes the breakaway trade before it becomes a big winner. During testing some trades return big profits even while the trailing stop distance is only five pips.
The Volatility Trader and Breakout Expert Advisor For MT4 – Room for Improvement
At this time, the Volatility Trader and Breakout Expert Advisor for MT4 should not be used by any trader or investor for automated trading in a live account. The risk for account meltdown is just too high. A short test run is all it takes to prove this point. In the strategy tester, the equity curve is going downhill from beginning to end without moments of recovery.
One factor that may have contributed to this poor performance in back testing is the extraordinarily high trade volume on each trade. The lot size should have been two times or even ten times lower than the present value. The huge lot size puts so much strain to the trading account, cutting short its chance of long-term survival.
Another area to look into may be the trade entry. It appears that one statement in the code for trade entry might be erroneous. A variable called Close is being used as the value of the close price of the current candle in the subsequent parts of the code while it was set to the bid price through MarketInfo in the earlier part of the code. This may affect the performance of the robot when corrected.