Triple System EA User Guide (trial version)

 

Triple System EA User Manual.

Contents

Introduction

Break out system

How it works

Inputs

Automatic Trading

Using Martingale

Pull Back System

How it works

Inputs

Scalping System

How it works

Settings

Automatic Trading

Using Martingale

Tips and tricks

Strategy Testing

 Introduction

The Triple System EA is essentially an Expert Advisor designed to trade your MT4 account on automation on the 1 hour time frame.  Although beginner traders and people with little time to study the markets can profit from its default settings; you can also maximise profits by adapting the settings to certain market conditions and turning parts of the system on and off.  In this manual we will go through each individual trading system, how it works, how to use the settings both on automation and manually and tips on how to maximise profits. It is advised that you use a VPS (Virtual Private server) to run the Expert Advisor to ensure any interruption in your internet connection does not disrupt the systems performance.

Downloading the Triple System EA to your MT4 Platform

If you are using the MT4 platform for the first time then it can be a lot to take in so in this short chapter we are going to go through how to install the system onto the trading platform. You will receive an email containing 2 files one called “TripleSystemEAv4” and another called “InitChecks”. You need to download these files to your computer and save them in a folder you can find. Next you need to go to your Computer hard drive local Disk(C:) and look for program files(86) here you will find your brokers MT4 platform. Open the broker platform file and look for MQL4 and double click to open. Open the “Experts” file and paste the downloaded TripleSystemEA.ex4 file. Then go back to the MQL4 Folder and open the “Include” file. Paste the downloaded “InitChecks” file that you downloaded into this file. Now restart your MT4 platform and you are good to go. You should see the TripleSystemEA under the Experts on the left of the platform.  If you need more clarification then please watch the short video.

Loading the EA on a currency pair

Once you have downloaded the EA to your MT4 platform make sure you have “Auto Trading” clicked and showing a green play arrow on the icon on your MT4 tool bar as illustrated below.

You can then add the system to a chart by left clicking and holding the left click button and dragging the Triple System EA over the chart that you wish to load it on and release. A pop up box will appear with 4 tabs across the top; About, Common, Inputs and Dependencies. As you can see from the illustration below we are looking at the “Common” tab. It is important that you have “Enable Alerts”, “Allow live trading”, “Allow DLL imports” and “Allow import of external experts” all showing a tick in the box.

 

If you try and load the expert with these un-ticked then you will receive an error message telling you the problem and the EA will remove itself from the chart. You do not need to worry about the “About” tab or the “Dependencies” tab. We will go through the “Inputs” Tab as we go through each of the trading systems.

The Breakout System

The breakout system is designed to catch high and lows of price action over a certain number of candles on the 1 hour chart. Although a simple algorithm drives the entry points the settings maximise profits using a safe martingale strategy. This particular part of the strategy takes the most trades and therefore can have the biggest affect on your profits.

Inputs

As with all the systems in this EA you get to choose your stop loss and take profit levels, in pips, from the entry point of the trade. The default stop loss is set to 50 on this system which has stood the test of time; however that does not mean that adjustments might be more profitable in the future.  Most trading methods recommend a take profit level at least 3 times the stop loss in order to generate a favourable risk reward ratio on your trades so take this into consideration when settings your stop loss and take profit levels.  As you can see from the screen shot below the default settings for take profit is 500 pips, this is because we are using a trailing stop loss and don’t actually expect it to go this far in one trade.

If you want to add some manual implementations to this strategy then one should consider support and resistance levels when setting stop losses and take profit levels (click here to learn more about support and resistance). Below is a screen shot of how this system might take a trade and set the stop loss and take profit levels by default and also how you might benefit by using the manual setting approach.

 

In this trade example you can see how the Triple System EA has taken a breakout trade on a new high and placed a 50 pip stop loss. The user has used a previous resistance level to manually set the take profit level which has maximised the profit.

Trailing Stop Loss.

The breakout system also has 2 types of trailing stop loss which you can use. The regular method of trailing; by setting an amount of pips that you want the system to start the trail and how many pips you want to trail by. Or you can use the sophisticated candle trail system which can be adjusted to trail by however many candles back from the price you wish. There are pro’s and con’s to both systems the pro’s being you can maximise profitability by protecting your trade from reversal but you can also leave a trade too early if you trail the stop loss too tight to the price. In the input settings you will see the section that controls the movement of your stop loss as illustrated below.

We start with the Move to breakeven setting which is really as it sounds. First you need to set “Using Move to Breakeven” to “true” then you need to choose how many pips in profit you want the trade to be before the stop loss is moved to break even. You also have the option to lock in a specified number of pips profit when it moves.

Next you have the option to initialise the trailing stop loss by setting that function to true or false. If you set it to “true” then you need to decide which type of trailing stop loss you want to use, Regular or Candle.

Regular trail will start to move the stop loss once profit has reached the amount specified in the “How many pips profit before trailing begins” input. Once that target has been reached the stop loss will then follow the price by the amount of pips that are specified in the “How many pips stop loss should the trail be” input.

Candle trail will look at the candle back from the price that you specify in the “How many candles to look back” input, then add the amount of pips that you specify in the “How much beyond candle to put stop” input, to either the high or the low of that candle depending on whether it’s a buy or sell trade. For automated trading the default settings have proven to work best so far.

In the example below we are going to look at how you might use the breakout system for pending news event. News events are announcements by government bodies that can affect the value of a currency either long term or short term. These news events are a daily occurrence and can see excellent profits if handled correctly.

In the above screen shot you can see how the trader has allowed the Breakout system to be active which has generated a buy and sell entry point and a stop loss for each eventuality.  On this occasion the breakout came as a sell. The user had activated the candle trail system which chased the price down holding a stop loss 14 candles back from the price.  If the price consolidates the stop loss will move closer and closer to the price until it eventually stops out or if it breaks out again it will trail with plenty of distance to further profit from the news announcement.

The System would have picked the same trade on automation however the default settings would hold a tighter stop loss trail and profit would have already been taken at 100 pips.

Lot Sizes

Lot size is the amount that you want to trade per pip on any trade. With the Triple System EA you can have different lot sizes for each system and you can have the EA automatically change the lot size as your account grows. There are a few things that you should consider when setting your lot size.

  1. How much risk you want to take per trade
  2. Are you using the martingale strategy

Everyone’s’ risk appetite is different so it is really a personal preference but a good guide for any trader is to risk around 1% – 5% of your equity per trade. An easy rule to follow is to trade 10p per pip or 0.01 lot size for every £1000 you have in your account.  If you are starting with less than £1000 then using the minimum of 0.01 is recommended.

Initial Lot Size

The initial lot size feature is the lot size for which you want to trade the account and will remain the same unless you have the auto lot sizing feature set to true or you have the martingale feature set to true. We will look at those settings next.

Minimum Lot Size

The minimum lot size setting is a little safety feature to stop the Automatic lot sizing feature from dropping the lot size too small when there are quite a few trades open. It is recommended that you have this set to the same as your initial lot size.

You can see where to set these inputs on the illustration below.

Auto lot sizing

As your account grows; in the interest of compounding your investment strategy you will probably want to increase the amount of money that you risk per trade. You can do this automatically by setting how much you want to increase the lot size per £/$1000 of equity your account increases. This is an excellent feature for those that want to use the system on complete automation.  However it is not recommended that you use this feature along with the martingale strategy which will be explained in the next section. You can see the settings illustrated for Auto lot sizing in the illustration below.

Martingale strategy

If you are not familiar with the martingale strategy; it is the concept of increasing lot size on losing trades until a single winning trade makes up for all the losses of previous trades and ads some profit. Unfortunately many unscrupulous Forex strategists use this system to make their results look exceptional when the truth is they do tend to eventually grow the lots size to big and the trading account starts to trade over leveraged and eventually LOSSES big chunks of the balance.  We have taken the concept of the martingale strategy and added some great features which act as safety nets not only to stop the account from being lost but to also enhance profits in the strategies that we use in this EA.  You can find the settings for the martingale in the inputs tab as illustrated below.

The first feature we are going to talk about is the Max lot size feature. This will stop the martingale strategy from getting too big and blowing your account in the event it has a series of losses. It gives the account a chance to recuperate without experiencing a huge drawdown. The default settings have been set according to the default lot size on this feature so care should be taken to adjust this setting if you decrease or increase your lot size. After a lot of years of testing the default settings have been adjusted to allow an average series of losses over the last 20 years with a max lot size that allows the account enough loss to win ratio to produce a steady upward equity curve over the long term. This feature is really for the long term automated trader with setting of 1% equity risk per trade and is not necessary for traders looking to trade the system with manual intervention.

There is also another martingale setting that is quite handy for the automated trader. The Martingale Profit setting is great for bringing back the money from losing trades when you are using the trailing stop loss. A disadvantage of trailing the stop loss, as many experienced traders will tell you, is the fact that a spike in the market can leave you with very little profit on what would have been an extremely profitable trade. Using martingale over long periods of time could prevent good equity curves if this happens a lot. To combat this we added the feature which stipulates how much profit must be made on a trade for martingale to return to the original lot size. It is recommended that this be set to the stop loss value you have set as you want to recuperate this value before you return to the original lot size.

Maximum amount of trades

This setting will stop the EA from taking more than the set amount of trades for any one strategy it is most relevant for the breakout strategy as the system will continue to open new trades on new highs and lows if the market is trending unless you limit it to a certain number of trades.

 

The Pull Back Trading System

The Pull Back trading system works as a stand-alone EA within the Triple System EA. And although the external inputs are almost identical to the breakout strategy the rules for trade entry are very different. This strategy consists of a number of moving averages which need to be positioned in a certain series for the trade to be activated.  It is designed to take advantage of pull backs in a trend which make excellent profitable trading opportunities.  As many of the settings are the same we are going to concentrate on the manual approach to using this system and recommend that you leave the settings at default for automated trading.

The pull back strategy can have extremely long trades in terms of pips and makes an excellent risk reward strategy. The default settings for this section are designed around the EUR/USD and therefore only recommended for use with that currency pair. Experienced traders that are aware of currency pairs with bigger swings in the market can adjust this setting to benefit from higher volatility pairs such as the GBP/USD or GBP/JPY.

The only section that we didn’t cover in the Breakout strategy is the hedging input. For beginners that are not aware of the process of hedging ; it is the action of opening another trade in the opposite direction on the same asset to hedge against a winning or losing trade. It is possible to reduce drawdown with this strategy and increase profit.  You will also notice that there is a not a close on opposite signal setting with this strategy this is because it simply does not benefit the strategy. If you enable hedging you can benefit from a losing or consolidating trade. Below is an illustration of the setting for hedging.

You can use the Pull Back strategy on manual implementation by waiting for a trade that has been trending well start to lose drive and show signs of being over bought or sold. A good time to look for these opportunities is at the end of the trading day when the market is starting to lack liquidity resulting from profit taking. Quite often a trend will pull back and often gain momentum in the opposite direction before the London traders start to buy back into trades around 8am the next day then the initial trend is resumed unless some geopolitical factors have caused the trend to reverse.  Setting the “use pull back strategy” input, to true at these times could be very profitable.

Of course these pull backs can happen any time of the day which is why trading on automation can also have its benefits.  Again this strategy is set to a default stop loss of 50 but using support and previous resistance as a guide can benefit when setting this up for different currency pairs.

The martingale and auto lot sizing systems work exactly the same for this strategy as they do for the breakout strategy.

The Scalping Strategy

The scalping strategy uses fast moving oscillator indicators to take trades and only looks for a quick 10 pip profit by default however these settings can be changed to suit a wider variety of currency pairs.  The scalping strategy has all the features of the breakout and pull back strategy such as the breakeven, trailing stop loss, both candle and regular as illustrated below.

 

The difference with the scalping martingale strategy is it works in the opposite way to the other two strategies.  The scalping strategy has a lot more winning trades than it does losing trades the martingale actually increases the lot size on winning trades until it reaches the average amount of winning trades in a row then it resets to its initial lot size input. These means that when the scalping strategy is winning then it is winning great then if it starts to lose then the lot size is limited to the initial lot size until it starts winning again.  When adjusting the lot size on this strategy be sure to adjust your MaxLotSize so that it hits the maximum after no more than 5 trades of wins in a row. The default setting is for a £10000 account so trading at £1000 will be a decimal move to the right. Below is a quick equation to make sure you have this set correctly.

Average winning streak 3-5 trades

Starting lot size 0.1 (£1 a pip)

Profit target 10 pips

Trade 1 = 10 x £1 win

Trade 2 = 10 x £2 win

Trade 3 = 10 x £4 win

Trade 4 = 10 x £8 win

Trade 5 = 10 x £16 win

As you can see if you are trading at £1 a pip and only want the Martingale strategy to allow 3 winning trades then you would need to set the MaximumLotSize to between £4 and £8 or 0.4/0.8 (brokers can differ on how they present lot sizes this could also represent 40/80p, The system calculates the brokers lot size but it is always advisable to find out what your brokers setting are so you can work out your martingale MaxLotSize) this would stop the Martingale from doubling again after 3 winning trades.

We always recommend that you test our Systems with a demo account of the broker you intend to use so you are familiar with how the EA works before you use it on a real money account. Have fun with it and we hope you find it as profitable as we have.

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