What is a trading bot?
Several of the manual processes you would ordinarily have to complete can be automated by a trading robot. When certain criteria are met, it might, for instance, make a purchase or sell order on your behalf, freeing up your time for planning and strategy. Even while you are away or asleep, it can still carry out these tasks because it runs on your laptop.
An EA, or expert advisor, is a trading robot that functions inside MT4. Expert Advisers were supported by MetaTrader from the start, which accounts for its continued popularity today. Expert Advisors are also used by traders to design trading indicators like Bollinger Bands and moving averages. You can utilize these indicators as inputs in MetaTrader, which overlays them on the charts to assist you in making more educated trading decisions.
Step 1: Download MetaTrader 4
Windows 7, 8, and 10 are all compatible with MetaTrader 4 (MT4), and your computer can run it without any additional setup requirements. Proceed to the platform download page on the official MetaTrader 4 website. But, you must first obtain a license from a trustworthy broker of your choice.
Step 2: Creating your own EA
The MT4 platform’s software has a built-in programming language to create your own Expert Advisor. The statically typed language known as MetaQuotes Language (MQL) is comparable to JavaScript or Java. Variables must be defined in advance and given a data type. Classes, class methods, and other elements of object-oriented languages are supported by MQL. You will create your code in the platform’s integrated development environment, MetaEditor, and compile it before running it.
Open the MT4 platform and select the “Expert Advisors” menu from the “Navigator” panel in the bottom left corner of your screen to see this for yourself. Go down to “Examples” from “Expert Advisors,” then expand the “Moving Average” folder. Finally, use the “Modify” option from the context menu of the “Moving Average” EA to open the code in MetaEditor.
Step 3: Backtest
By backtesting your Expert Advisor using past data, you may determine whether or not your work is error-free. Backtesting is the process of comparing the performance of your EA to previous pricing and, in some circumstances, volumes. Backtesting your EAs is simpler than you might imagine with MT4.
The “Strategy Tester” module of this EA lets you compare the performance of any EA to historical data. By including lags and re-quotes, you can even make your trading environment more realistic. To open the testing panel in the lower portion of the screen, simply right-click your EA and choose the “Test” option. There, you may select a chart’s symbol and timeframe. To backtest your EA, click the green “Start” button. By default, MetaTrader will compare it to historical data going back to the year’s beginning.
When the test is finished, MetaTrader will provide in-depth statistics on the test. A wide range of risk metrics, such as your bot’s Sharpe Ratio and biggest % drawdown, are among them. These also contain your return on investment, gross return, net return, and other financial figures. Compare your EA against earlier iterations or other EAs using these.
Conclusion
It is crucial to keep in mind that past success does not ensure future success. Markets may evolve to the point where previous connections and correlations cease to exist. No matter how eager you may be to start trading, it’s crucial to concentrate on risk control and money protection.