Harnessing Candle Filters: A Simple Martingale EA for MetaTrader 4

Hey there, fellow traders! Today, I want to share an interesting tool that can add a bit of finesse to your trading strategy—the Candle Filter Martingale EA for MetaTrader 4.

Check out this quick video overview to see it in action:

Just a heads up: while the ideas are mine, the code was expertly compiled using fxdreema.

Understanding the Concept

So, what’s the deal with this EA? Essentially, it kicks off a trade when the candle size exceeds a certain number of pips, which you can adjust in the EA settings. If a buy trade goes south, this EA will scale up the lot size for the next trade, giving you a fighting chance to recover your losses.

The scaling factor is also customizable, allowing you to tweak it to fit your risk tolerance.

Core Principle

The backbone of the EAs I design is all about controlling those pesky consecutive losses instead of trying to predict market moves. By increasing the required candle size, we aim to keep those consecutive losses to a minimum over a longer testing period. This way, we can safely implement the martingale strategy without getting burned.

Optimal Settings

I’ve found that for testing, the USDJPY pair on a 4-hour chart works great, but you can experiment with other timeframes too. Typically, I set the candle size at 20 pips or more—30 is even better. Anything below 10 pips usually doesn’t cut it.

Take Profit and Stop Loss

For TP (Take Profit) and SL (Stop Loss), I like to stick to a 1:1 ratio, usually setting them both at 50 pips. You can also play around with settings like 75 TP and 50 SL or 100 TP and 50 SL, especially if you're using a lower scaling factor, like 1.5.

When you adjust the TP to SL ratio, it can significantly impact your winning versus losing trades, as well as the number of consecutive losses you might face.

As a rule of thumb, I often find that the maximum consecutive losses tend to be about six times the average losses. For instance, if your TP:SL is 50 pips to 50 pips, your average wins to losses might be around 2:2 or even worse due to the spread, with a max of about 12 consecutive losses. Ideally, we want to keep this under 8—6 would be fantastic—using that candle filter.

Let’s Collaborate!

I’m all ears for your feedback! Let’s brainstorm some more advanced strategies to manage consecutive losses and really tap into the power of martingale in this unpredictable market environment.