Trading Robot

Created by Support Ridgecorp, Modified on Sat, 19 Oct at 1:31 AM by Support Ridgecorp

Definition: A trading robot, or Expert Advisor (EA), is a script or program written in the MQL5 programming language that automatically performs trading operations on behalf of the user in the MT5 platform.
Automation: EAs automate trading decisions, such as entering or exiting trades based on certain technical indicators, chart patterns, or other rules.
Types of EAs:
- Signal-Based: Opens and closes trades based on specific indicators like Moving Averages, RSI, or MACD.
- Scalping EAs: Focus on taking quick, small profits from price movements.
- Grid and Martingale EAs: Use a grid of orders or increase trade sizes after losses.
- News Trading EAs: Focus on high-impact economic news releases.

Meta Trader 5 Market:
- Access the Market from the MT5 platform itself by going to the "Market" tab.
- Here, you can find both free and paid EAs with reviews and performance metrics.
MQL5.com Website:
- The official MQL5 community website has a section for purchasing or downloading free EAs.
- Traders can also hire freelancers to create custom EAs according to their specifications.
MT5 Codebase:
- Located directly within the MT5 terminal under the "Codebase" tab.
- It provides free EAs, indicators, and scripts shared by the community.

Logic-Based Trading:
- EAs operate based on pre-defined rules coded into them. These rules can be based on technical indicators, price patterns, time of day, or a mix of various conditions.
Signal Generation:
- The EA scans the market for buy or sell signals according to the trading strategy. For example, it might look for a crossover between two moving averages.
Automatic Execution:
- When a signal is detected, the EA can automatically open a position, set stop-loss and take-profit levels, and close trades when certain conditions are met.
Risk Management:
- EAs can be programmed to manage risk by adjusting trade sizes, using trailing stops, or setting limits on daily losses to avoid significant drawdowns.
Back testing and Optimization:
- Before using an EA in live trading, traders can test its performance on historical data using the MT5 Strategy Tester.
- This allows for optimization of input parameters to improve the EA's profitability and robustness.

Emotion-Free Trading: Removes emotional biases like fear or greed that might affect manual trading decisions.
24/7 Market Monitoring: EAs can run continuously, ensuring that trading opportunities are not missed, even when the trader is away.
Back testing Capabilities: EAs can be tested on historical data to assess their performance before using them in live markets.
Consistency: EAs execute trades based on fixed rules, providing a level of consistency that manual trading may lack.

Market Conditions: EAs that perform well in trending markets may struggle in range-bound or highly volatile conditions.
Over-Optimization: Tweaking an EA too much for historical data (curve-fitting) can result in poor performance in live markets.
Technical Issues: An EA can malfunction if not properly coded, leading to unexpected trades or losses.
VPS (Virtual Private Server): For uninterrupted EA performance, many traders use a VPS to run their EAs 24/7, reducing the risk of connectivity issues.

Trend Following: EAs that identify and trade in the direction of major market trends, using indicators like Moving Averages.
Mean Reversion: EAs that bet on prices reverting to the mean after significant deviations.
Breakout Strategies: These focus on capturing large price movements when price breaks out of a defined range.
Scalping: Focuses on making small profits from minor price movements, typically requiring low spreads and fast execution speeds.

Performance Metrics: Look at key statistics like profit factor, drawdown, win rate, and Sharpe ratio from backrests.
Live Trading Records: Prefer EAs with verified live trading records over just backrest results.
User Reviews: Read reviews from other users to understand their experiences with the EA.
Customer Support: Ensure that the developer offers support in case of any technical issues with the EA.