The ATR Trailer Forex expert advisor is a unique trading system that uses the trailing stop mechanism to capture large market movements. Unlike other expert advisors that rely on specific entry rules, this EA does not have any particular entry rules. Instead, it relies on the trailing stop to limit losses and secure gains. The ATR (Average True Range) indicator is used to determine the trailing stop, making it an essential tool for the EA’s trading strategy.
This article will provide an overview of how the ATR Trailer EA works, including its reliance on trailing stop and ATR indicator. It will also discuss the input parameters used for optimization and analyze the performance results of the forward test.
ATR Trailer EA Features
- EA version 1.0
- Trades on Major Currency Pairs
- Developed for H1 Timeframe
- Can only be used for MT4
- It measures the average range of price movements
- Fully automated trading strategy
- Customizable settings including optimized preset files
ATR Trailer EA Strategy
- The ATR Trailer EA controls the initial position’s direction via the Start With input parameter. The first position’s direction is determined by this parameter, with a value of 1 indicating a short position and 2 indicating a long position. Subsequent positions are opened in the opposite direction to the previous position. When the trailing stop is hit, the current position is closed automatically, and a new position is opened in the opposite direction.
- Unlike other expert advisors, the ATR Trailer EA does not use any fixed stop-loss or take-gain levels. Instead, it relies on the trailing stop to limit losses and secure gains. The trailing stop is based on the ATR indicator and is set to cover up 99.73% of the daily fluctuation with the default ATR settings (period = 24 and multiplier = 3) and the optimal timeframe (H1). However, it is important to note that the normal distribution of the price change is not always the case in the real market.
Trailing Stop and ATR Indicator
- The trailing stop is a popular trading tool used to limit losses and secure gains. It is a stop-loss order that moves with the market price. As the price moves in favor of the trade, the trailing stop also moves, allowing traders to lock in gains. However, if the price moves against the trade, the trailing stop will not move, and the trade will be closed at the specified level.
- The ATR indicator is used to determine the trailing stop in the ATR Trailer EA. The ATR indicator measures the average range of price movements over a specified period. The ATR indicator is used in the EA to calculate the trailing stop value. The ATR value is multiplied by a multiplier to determine the trailing stop level. The ATR value is an essential component of the trailing stop, as it determines how far the stop-loss level is from the current market price.
Input Parameters for Optimization
The ATR Trailer EA has three input parameters that can be optimized for better performance. The ATR Period input parameter determines the period of the ATR indicator, which is used to calculate the trailing stop. The ATR Multiplier input parameter is used to multiply the ATR indicator value, which determines the trailing stop level. The Start With input parameter controls the direction of the first position, with a value of 1 indicating a short position and 2 indicating a long position, optimizing the input parameters is essential for improving the EA’s performance. Different input parameters may produce different results, and traders need to find the optimal settings that work best for their trading strategy.
Performance Results of Forward-Test
The ATR Trailer EA was forward-tested on an 8-month period using the default settings on EUR/USD H1 chart. The position’s volume was set to 0.1 standard lots, and the EA made 200 trades, of which 39.50% were profitable. The forward-test showed a 15.3% profit with a maximum drawdown of 5.8%.
One of the key features of this EA is its use of the ATR indicator to determine the trailing stop levels. The ATR indicator is a measure of the average range of price movement over a specified period of time. By using the ATR indicator, the EA sets the trailing stop level at a certain distance from the current price, which is proportional to the volatility of the market.
The direction of the initial position is controlled via the input parameter, and each next direction is opposite to the previous one. When the trailing stop is hit, the position is closed automatically, and a new one is opened. This approach allows the EA to capture big market movements while limiting the risk of losses.
In terms of performance, the ATR Trailer MetaTrader expert advisor has shown promising results during the forward test. On the 8-month period, it delivered a profit of approximately 15.3%, with a maximum drawdown of 5.8%. The EA made a total of 200 trades, of which 39.50% were profitable. The default settings were used in this forward demo test on EUR/USD H1 chart.
It’s worth noting that the ATR Trailer Forex expert advisor doesn’t use any fixed stop-loss or take-profit levels. Instead, it relies on the trailing stop to limit losses and capture profits. This means that the EA can adapt to changing market conditions and adjust the trailing stop level accordingly.
On the 1-hour EUR/USD chart (the forward-test settings), the EA trades once every day on average. Traders can optimize the performance of the EA by adjusting the input parameters, such as the ATR period, ATR multiplier, and the direction of the initial position.
Conclusion
The ATR Trailer Forex expert advisor is a good tool for traders who want to enter big market movements while limiting the risk of losses. Its use of the ATR indicator to determine the trailing stop levels, along with its adaptive approach to managing trades, makes it a valuable addition to any trader’s arsenal. Just always keep in mind that past results are by no means any indication of future performance. You should only ever test an expert advisor on a demo account to begin with and make sure that you have a clear understanding of how it works.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
