Author:
Meet our author, a dedicated researcher diving into the stock and FX markets. This EA has undergone backtesting from July 1, 2011, to January 13, 2012, specifically on EURUSD. It impressively turned $10,000 into $59,294, but remember, past performance doesn’t guarantee future results!
This system trading tool is built on the premise that markets don’t always move in a straight line. Even when the market is trending, it often pulls back. These pullbacks typically occur at significant support or resistance levels, or when dominant traders decide to take some profits, pushing the market in the opposite direction temporarily. Our EA capitalizes on these reversals, and it shines brightest when trading with the trend.
How It Works:
The EA operates by checking if the MA(34) on the daily chart is trending upwards. If it is, it opens a Buy trade and vice versa. If the market continues in the trend direction, the EA will close the position according to the take profit (TP) parameter, which defaults to 60 for 4-digit brokers and 600 for 5-digit brokers.
If the market moves against the opened trade direction, the EA will open another position in the same direction as the previous trade at -600 (-60 pips) with the same lot size. If the market then moves in favor of the trade, both trades will be closed at the TP target of the last trade. This process repeats for additional levels, increasing the lot size to 2, 4, and 8. For example, if your initial lot size is 0.1, the subsequent levels will look like this:
Level |
Lot Size |
0 |
1 x 0.1 = 0.1 |
1 |
1 x 0.1 = 0.1 |
2 |
2 x 0.1 = 0.2 |
3 |
4 x 0.1 = 0.4 |
4 |
8 x 0.1 = 0.8 |
The EA is equipped with several parameters, with the most crucial being:
- TP: Take Profit. For brokers using 4 digits, change the default TP to 60 instead of 600.
- DP: This refers to the timeframe, with the default being the daily timeframe (1440). You can apply the EA to any chart, but it will utilize DP for its Moving Average.
- MAP: Moving Average Period, which defaults to 34.
- MaxTrade: The maximum number of trades the EA will open in the same direction.
- TradeType: If set to 0, the EA will follow the MA direction; set to 1 to force buy trades, and 2 to force sell trades.
Recommendations:
This EA works best when combined with other indicators, such as moving averages, Bollinger Bands, and support/resistance levels. Feel free to switch TradeType between 0, 1, or 2 based on the signals from your indicators. Always use a lot size that aligns with your money management strategy.
UPDATE: Version 2
The updated MLTrendE V2 offers additional parameters, including:
- maReversal: Set to true/false. If true, the system trades using EMA(500). If the price crosses below EMA(500) upwards, it closes any sell positions and sets TradeType to 1. Conversely, if it crosses downwards, it closes buy positions and sets TradeType to 2. This parameter is best used with the H1 timeframe and can be backtested using open prices.
- allowSL: Set to true/false. You must set maReversal to false to use allowSL. When true, the EA utilizes the original multiple levels system while implementing a stop loss on the last opened position. If this position hits SL, all trades at every level will close, reversing the trend by adjusting TradeType. You will also need to set two additional parameters: SL and MaxTrade. When allowSL is activated, backtesting can only be done using every tick.
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