VR Smart Grid Lite 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!
The VR Smart Grid Lite Expert Advisor For MT4 employs simple price action and a martingale strategy in trading the financial market. This robot can be applied to any timeframe of any foreign exchange pair. The higher the timeframe, the better. This is because the expert advisor takes the candlestick sentiment of the previous candle as the main factor for trade entry.
With the use of the martingale approach, the trading system hopes to win in every trade cycle. In addition, this robot utilizes some kind of hedge in an effort to reduce drawdowns. Also, the hedge trade is set in place whenever the market seems to have no clear direction. The martingale approach comes into play only when the market has decided to go in a certain direction.
Readers might find it interesting to learn that this trading system was able to generate profits when run in testing for a period of five months of test data. Plus, this result came with a manageable drawdown. Before using this expert advisor in real trading, though, due diligence is a must because automated trading systems carry huge risks, and more so with martingale-based strategies.
The VR Smart Grid Lite Expert Advisor For MT4 – Entry Criteria
The VR Smart Grid Lite Expert Advisor combines different approaches in entering and managing trades. Apart from the martingale scheme, a grid system is also used to set a minimum distance between trades and control drawdowns. Moreover, hedging strategy is added to the mix to control risks a little further. This is possibly the reason why the expert advisor has the “smart” qualification in its name.
The robot offers a few parameters in Inputs that the user must understand and learn to use to get the most of this expert advisor and achieve the intended results. These parameters and their default values are enumerated below, along with a brief explanation.
- iTakeProfit = 300 – This amount is in points. It means that the take profit is 300 points, or 30 pips. Each trade has an explicit take profit.
- iStartLots = 0.01 – The first trade in every cycle has a lot size of 0.01 unless the user sets another value.
- iMaximalLots = 2.56 – This is the maximum lot amount for any trade in a trade cycle.
- iCloseOrder = Average – This is the method of closing orders. The other option available to the user is PartClose. When the average option is selected, the set of trades moving against the current trade will be closed at a single take profit price.
- iPointOrderStep = 390 – This value is in points. It is equivalent to grid size. When price moves 390 points (or 39 pips) against the initial trade, another trade in the same direction will be taken. This value also applies when the robot adds the hedge trade.
- iMinimalProfit = 70 – This value is in points. In case the robot has taken multiple orders of the same type, the take profit is set 70 points (or 7 pips) beyond the breakeven price of the set of orders.
- iMagicNumber = 227 – Assigned to each trade taken by the expert advisor, this number makes the trade identification easy so as to facilitate trade management.
- iSlippage = 30 – This amount is in points, meaning the user accepts a maximum slippage of 30 points (or 3 pips) when the server or terminal executes an order.
The user must be aware that the expert advisor does not utilize any type of technical indicator when determining a trade entry. The robot employs simple price action to do just that. Whatever timeframe the robot is attached to, it reads the open price and close price of the previous candle and compare these prices. If the close price is above the open price, it means the previous candle is bullish, so a buy trade will be taken on the next candle. On the other hand, if the close price is below the open price, it suggests that the previous bar is bearish, so a sell entry is indicated to be taken on the next bar.
As defined in Inputs, the first trade has a position size of 0.01, with a take profit of 30 pips but no stop loss. If the trade makes it to the take profit target, the trade is closed in profit. If in case price moves the other way and has gone at least 39 pips, the hedge trade will be put in place with the same lot size and take profit value as the original trade. At the same time, another trade in the direction of the original trade is added with a position size twice bigger than the first trade.
When price moves strongly in one direction, resulting in the opening of multiple trades against the current trend, the multiple trades will have increasing position sizes but will have the same take profit target. This is the case if the default value of Average for iCloseOrder is maintained. In this way, all these counter trades are closed at once and no trade is left behind. Since the lot sizes are getting bigger, it will take just a small price correction to close all trades in profit.
The VR Smart Grid Lite Expert Advisor For MT4 – Exit Criteria
As already pointed out, the VR Smart Grid Lite Expert Advisor does not use a stop loss at all as it relies on the martingale scheme to close all trades in profit. This trading system attempts to avoid losses at all costs even at the expense of large drawdowns. However, if the trade entry strategy is effective, heavy drawdowns could be avoided because the number of open trades in a trade cycle is controlled. The entry strategy should use technical tools designed to be used in trading ranging markets. Oscillators work well in ranging markets. Moving averages should be avoided.
The VR Smart Grid Lite Expert Advisor For MT4 – Room for Improvement
The VR Smart Grid Lite Expert Advisor performed well in the strategy tester. The equity curve kept going upward from the beginning until the end of testing with only one or two bumps along the way. Several trades were taken throughout the five months of testing with historical price data. The robot averaged 71 trades per month, and 66 percent of the total number of trades was profitable. This win rate is high.
The end result is 13 percent of profit and a profit factor of 2.0. Any profit factor greater than 1.0 is already considered profitable. Therefore, this expert advisor has the potential to generate huge profits for the trader. Plus, this happens with a relatively acceptable drawdown of 13 percent. This amount of drawdown for a martingale trading system is acceptable for most algorithmic traders.
One thing that can be improved in this expert advisor is its simplistic approach to trade entry. Using the sentiment of the previous candle as signal for entry is often not enough. This setup occurs very often in any trading day that would result in low-probability trades. To avoid big drawdowns, a trade cycle should have few trades. Therefore, the entry strategy should be optimal.
One way to improve the entry method is by using a battery of technical indicators designed for use in ranging markets. These indicators include the relative strength index, stochastic, and a host of other oscillators. A moving average is not suitable for ranging markets. If possible, multiple-timeframe analysis is applied to qualify trade entries.