Download a Forex Candle pattern MT4 Expert Advisor. See how it trades $5K to $1Mil in live trading.
Downloadable Forex Candle patterns MT4 Expert Advisor trades $5K to $1Mil in live trading. See how.
Japanese candlestick trading has been around for decades. A candle gives a lot of information to the trader. It shows:
The high for the period
The low for the period
The opening price
The closing price
The gains made by the bulls or bears
The range of trading during the period.
This EA focuses on the candle high and the candle low as those reading often represent short term support and resistance. These levels represent decision points when trading this EA. At these points you need to tell the EA to trade breakouts or bounces.
Once the new candle starts forming the trading question is: “Is the price going to break-out of the previous trading range or bounce back to the previous trading range?”
By using the Candle trader EA you can trade either the breakouts or bounce or both as they occur over a 24 hour period.
Bounce or Breakout ?
So the big question is – When is the price likely to breakout of the current range and when is the price likely to bounce back into the current range. The price behaves differently depending on the time of day. In times of low volatility bounces are more likely to happen. In times of high volatility breakouts are more likely to happen.
If you can work this out, you can be a very successful Forex trader. It really isn’t that difficult. Let’s look at ways to work out the time of day when breakouts will occur or when bounces will occur.
Personal observation. Look at the trading charts over a period of 24 hours and identify the quite times (low volatility) and hectic times (high volatility) with larger candles.
Look at recorded statistics. This link https://www.mataf.net/en/forex/tools/volatility will give you statistic of when currencies have low volatility and when they have high volatility during the day and during the week.
Optimising the EA. When optimising the EA you will find the best time when breakouts work and the best times when bounces work. You should do this for all timeframes and all currencies to find the best combination of currencies, settings and timeframes. You can then sort them in order of historic performance.
Forward trading. You can test you finding by trading them for a few weeks on a demo account and then switching to a live account once you are perfectly happy.
So let’s look at this EA.
Firstly, this is a trading tool. It must be managed by it owner. It is not a mindless, plug and play, set and forget that requires no thought. Once you have done all the homework required to determine which currency, timeframe and setting will give you the best chance of success can you let it trade automatically. It will then trade looking at the previous candle to find the decision points and activate the decisions as instructed.
So let’s look at the instructions you have to give the EA:-
The first instruction it asks is the minimum size of the candle. Why this is important is that candles that are too small may not have the minimum volatility to give a reasonable result. When candles are very small like say 2 pips trading decisions may not give consistent results. This setting is also very dependent on the timeframe used. The best way to determine and refine this setting is by using optimisation and forward testing.
The instruction required if you want to the EA to trade breakout trades or bounce trades. This a drop down menu option. See the discussion prior to this section how to decide that.
This instruction requires your to tell the EA whether you want to trade Buy only, Sell only or Buys and sell together. This setting is very useful for US traders or when experiencing strong trends
The next instruction is the maximum spread at which you want to enter trades. You may get an entry signal when the broker has increase the spread due to announcements, weak-ends, liquidity etc. You should not trade when spreads are abnormal and this setting will protect you from doing so. This setting will vary from currency to currency and broker to broker. Common-sense is a good guide to use when determining this instruction amount.
The next instruction you have to give the EA is how to position size your transactions. This is related to how much do you want to risk per transaction. There are 4 methods. Experiment with all 4. Try not to risk more than 1 or 2 percent of your account in the beginning using any of the methods.
The next instructions are how big your stop need to be in pips. Simply enter the amount. The amount are best determined by optimisation and forward testing.
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