Trading Systems

SpotLight Expert Advisor Description & USER MANUAL

14 May 2018, 22:43
Thomas Gruening
Thomas Gruening
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General Information

SpotLight EA is an multi strategy expert advisor. Its application is possible as a night scalper EA, as a trend following EA or as swing trading EA for day trading. In the night scalping mode without activated main trend filter, the integrated other filters filter a trend-free market environment. In this range market, trades are placed in the opposite direction at the edges of the range. With the activation of an additional main trend filter, i call it trend-following mode, tries this mode to trade short-term pullbacks during a overriding H1 trend (in trading time frames M1, M5, M15, M30). Thus, all-day trading during trend phases is also possible. With this activated main trend filter only buy trades can be opened in an upward trend and only sell trades during a downward trend. With the support of special settings, longterm swing phases in the chart can also be traded in higher time frames (H4, D1).

The main indicators of SpotLight is the the RSI and for trend determination are ADX and moving average. The timeframe setting for the main trend filter is variable. The RSI works in the respective choosen MT4 chart timeframe. This means that if you use the SpotLight EA in MT4 chart timeframes M1, M5, M15 or M30 and set the main trendfilter for overriding main trend e.g. H1, H4 or D1, then trades will only be opened if the RSI touch the opposite level in the overriding selected main trend.

If you use higher timeframes e.g. H4 or D1 and set the maintrend in timeframe e.g. M30 or H1, then the RSI will only be open trades when this trend in M30 or H1 goes back in the opposite direction. So, for example in swing trading mode RSI in H4 timeframe is still above level 70. A selltrade is triggered only when the trend in H1 is already down again. If the trend in H1 is still up, no sell trade is opened.

Recommendations

  • Pairs: EURUSD, other major pairs can be used after optimizing the parameters
  • Broker: It is recommended to use an ECN low-spread broker and a suitable VPS Provider
  • Trading days: All weekdays
  • Trading Timeframe: M5
  • Minimum Deposit: 100 USD, Recommended 300 USD upwards
  • Minimum Leverage: 1:200
  • Risk setting, when trading a single pair in a single account: <20 low, <40 middle, >40 high
  • Risk setting, when trading multiple pairs in one common account:  Recommendation; even more pairs are used, the lower the individual risk is to be selected.

    Benefits

    • The EA has its own Magic number and is ideally suited to complement other EA
    • The EA open some trades during a short-term pullback within a stable filtered out maintrend
    • Equity protection by fixed Stop Loss and hidden SL application
    • Integrated News filter prevents trading during important relevant economic news

    Inputs‌


    == Trading Time Settings ==
    • UseDrawDown if true, then drawdown mode is active
    • MaxAllowedDrawDown close all trades if the current equity drawdown more then x %
    • Trading Hour Start hour in which the EA starts the trading period
    • Trading Minute Start minute in which the EA starts the trading period
    • Trading Hour End hour in which the EA ends the trading period
    • Trading Minute End minute in which the EA ends the trading period
    • Use Close Time Mode if true, then the close time mode will be taken into account in the trading
    • Close Hour hour in which the EA close open trades
    • Close Minute minute in which the EA close open trades


    == General Trading Settings ==

    • Allowed Spread max allowed spread
    • Slippage max allowed slippage
    • Use LotMultiplier false means trading lotsizes without martingale feature; true means trading lotsizes with martingale feature
    • LotMultiplier Factor for determining how much the lot size should be increased - e.g. lotsize first trade = 0.02 / LotMultiplier = 2.0, then lotsize second trade = 0.04 and lotsize third trade = 0.08
    Please note that this lot multiplier function should be used with care. It is a martingale cycling component. It offers opportunities and also involves high risks. If you do not want to take this higher risk, you can also use the EA without the Martingale feature.
    • Use Money Management false means trade with fixed lot size; true means trade with automatic lot size via risk setting
    • fixed LotSize if false, then trade with fixed lot size
    • Risk percentage of free margin to trade - e.g. risk 20 means 0.02 lot per 100 USD free margin
    • max Lotsize max allowed lot size to open trades
    • Magic Number buy number to identify each buy trade
    • Magic Number sell number to identify each sell trade
    • Order Comment set your trade comment

    == Filter Settings ==

    • UseGridFilter if true, then GridLevel mode is active
    • GridLevel minimum distance in points between the following trades of an Buy or Sell cycle
    • Use Swap Filter if true, then the swap will be taken into account in the trading
    • Minimum Swap choose minimum swap value
    • YMinutesRange amount of time in minutes to midnight, in which the swap should be taken into account
    Example: In the Symbols tab of the MT4 terminal, right-click on the symbol EURUSD. Then press "Specification". Now you see the respective long and short swap values for EURUSD. The long swap is currently -6.94 for Tickmill and ViproMarkets. You must set the swap filter value lower in the EA setting. For this example, -7.5. All normal negative swap values are then taken into account during trading. On a triple swap day (usually Wednesday), the negative swap is automatically tripled. Then, 3 x -6.94 = -20.82. Thus, the permitted swap value is -7.5 > -20.82. There will be no buy trades opened 30 minutes before the Rollovertime (0.00). With YMinutesRange, you can set the time how many minutes before 0.00 no trades with too high a negative swap should be opened.
    • Trend Filter Period M5 trend filter period time frame M5
    • Trend Filter Value M5 trend filter value time frame M5
    • Trend Filter Period M15 trend filter period time frame M15
    • Trend Filter Value M15 trend filter value time frame M15
    • Trend Filter Period H1 trend filter period time frame H1
    • Trend Filter Value H1 trend filter value time frame H1
    The trend filters in the different time frames can be used to filter out a suitable market environment. The filter values are the maximum allowed values. This means that with a trend filter value of 50, trades are possible up to a trend of 50 in the respective time frame. Please note: In Nightscalping mode, low trend values tend to be advantageous. In Trendfollowing mode, higher trend values are likely to be used because they are to be traded during trend phases. The lower the trend values of the filters, the less trendy is the market. The higher the filter period, the more accurately the trends are determined.
    • RSI Filter Period period RSI indicator
    • Indicator Buy Value min RSI value to open buy trades
    • Indicator Sell Value max RSI value to open sell trades

    The RSI indicator is the authoritative indicator that generates the trades when the other filters are in the limit. By changing the period and the values, the trading can be adjusted to your own requirements.

    As is the case with many forex indicators; The higher the period is selected, the more accurate signals are displayed. However, fewer trades tend to be generated.  The lower the period is chosen, the more trades will be generated. There will also be more false signals.

    • Vola Filter Period volatility filter period
    • Vola Filter min min allowed value volatility filter
    • Vola Filter max max allowed value volatility filter
    With the Vola filter you can limit the desired volatility. The period and the Min and Max values can be selected by yourself. Trading in extremely low or high volatility phases is to be avoided. Very low volatility can be a sign of a waiting market and an imminent outbreak in one direction. Excessive volatility is a sign of an extreme market phase. The market is often even more unpredictable than in normal volatile market phases.
    • Bandwidth Filter min min allowed value bandwidth filter
    • Bandwidth Filter max max allowed value bandwidth filter
    The bandwidth filter is another filter, which helps to find ideal market conditions for trading with SpotLight. He is based on Bollinger Bands indicator and  he will mainly improve the trading on Monday AM, because if the setting is correct large weekend GAP can be filtered out.
    • Use Maintrend Filter if true, then main trend filter mode will be taken into account in the trading
    • SetTimeFrame here you can choose your favorite timeframe für den maintrend filter
    • Maintrend Period fast first main trend filter fast period
    • Maintrend Period slow first main trend filter slow period
    • Maintrend Filter Period second main trend filter period
    • Maintrend Filter min min allowed value second main trend filter
    The main trend filter can be used to trade a trend following strategy with spotlight. If the maintrend filter is active, only Buytrades in a defined upward maintrend and only Selltrades in a defined downward maintrend can be opened. The indicator that is relevant for opening the trades is still RSI.

    The maintrend filter uses a fast and slow moving average indicator. The second maintrend indicator is the ADX. Defined by period and value. By changing the parameters you can define the basic trend for opening trades.

    == Trade Management ==

    • MaxOpenTrades max allowed number of buy or sell trades
    • TradesFrequencyMins time interval in minutes between opening trades
    An ideal balance to find by number of allowed trades and their opening time interval can be helpful in optimizing the trading for individual pairs. The more trades are allowed and the lower the time interval is chosen, the riskier the trading is set. And vice versa.
    • Use virtual TP an SL false means trading with existing separate TP and SL value for each trade; true means in addition to the existing fixed TP and SL value per trade, a common virtual TP and SL value is determined for all open trades. Upon reaching the virtual TP or SL level, all participating trades are closed together.
    • virtual SL value virtual Stop Loss in points
    • virtual TP value virtual Take Profit in points
    • TP Factor factor to determine the Take Profit; the factor depends on vola filter
    • SL Factor factor to determine the Stop Loss; the factor depends on vola filter

    The following example illustrates the relationship between given market volatility and the TP and SL values.
    Volatility is limited in standard setting by the Vola Filter Value min with 25 points and Vola Filter Value max with 300 points.  Example: Current volatility is 40 points. TP Factor = 0.6 and SL Factor = 10.0 If a trade is now generated, the EA determines the following TP and SL values. SL = 40 x 10.0 = 400 points and TP = 40 x 0.6 = 24 points The TP value can further vary. If parameter value "TP min in Points" is 25, then 25 is greater than the above determined TP value. The EA therefore takes 25 points as a TP value.

    • TP min in Points min value Take Profit in points
    • TP max in Points max value Take Profit in points

    If the TP value, calculated on the basis of the given volatility, appears too low or to high, the TP value can be limited with this parameter.

    • SL max in Points max value Stop Loss in points

    If the SL value, calculated on the basis of the given volatility, appears too high, the SL value can be limited with this parameter.

    • Use Safe Mode false means trade without safe mode indicator, true means trade with safe mode indicator and hidden SL

    Usually, opened Trades can be closed if trades hit (virtual) TP, SL or Close time values. But is SafeMode active, the integrated SafeMode indicator terminates the trade prematurely if the trade is moving tendencially in the wrong direction. If the trade slowly tends in the wrong direction, the open trade is closed if the price touches the edges of the used indicator. Bollinger bands is the indicator in Timeframe M5. The default period is 20. If the period is increased, the trades with active SafeMode will tend to close later. When the period is reduced, the trades tend to close sooner.

     
    Please note: The SafeMode tends to prevent some SL hit, but it also tends to prevent the possibility of hitting a TP later in a recovery.
    • Safe Mode Indicator Period safe mode indicator period

    == Trading Day Settings ==

    • MondayAM true if true, then trading on Monday AM is possible
    • MondayAMStartTime start time trading Monday AM
    • MondayAMEndTime end time trading Monday AM
    • MondayPM if true, then trading on Monday PM is possible
    • MondayPMStartTime start time trading Monday PM
    • MondayPMEndTime end time trading Monday PM
    Sets for the other weekdays are similar.

    == News Filter Settings ==

    • UseNewsFilter true if true, then news filter is active
    • CloseAfter_BeforeMins if true, then already open trades are closed at time x-BeforeMins and new trades will not be opened until y-AfterMins; if ' false' then already open trades remain open at the time x-BeforeMins and (only) new trades will not be opened until y-AfterMins
    • SymbolsToCheck news relevant pairs can be set individually
    • UseHighImpact if true, then High Impact News will be considered
    • HighBeforeMins suspend trading from x minutes before High Impact News
    • HighAfterMins suspend trading until y minutes after High Impact News
    • UseMediumImpact if true, then Medium Impact News will be considered
    • MediumBeforeMins suspend trading from x minutes before Medium Impact News
    • MediumAfterMins suspend trading until y minutes after Medium Impact News
    • UseLowImpact if true, then Low Impact News will be considered
    • LowBeforeMins suspend trading from x minutes before Low Impact News
    • LowAfterMins suspend trading until y minutes after Low Impact News

    To use the news filter, you have to add this URL http://ec.forexprostools.com/ in the setting of MT4. Then allow WebRequest for listed URL


    ‌A live monitoring of the SpotLight EA can be found here: SpotLight-Signals

    F. A. Q.


    1. No results in the Backtest? Answer: Default value "Allowed Spread" in EA is 15 points. Spread value in MT4 Strategy tester must not be "current". The value must be less than 15 points.

    2. EA display „Open D1 Chart“. What should i do? Answer: Nothing. You do not have to open a D1 chart separately. The EA automatically determines the day of the week based on the D1 data in the background.

    3. How can news and special events affect the performance of SpotLight? What is to be considered? Answer: Important news during the trading period can adversely affect the performance of SpotLight. This also means that avoiding trading during important news can improve the performance of this EA! I use the economic calendar from investing.com. For me news are relevant just before, during and shortly after the trading time. I mean in particular all 3 Bulls (high impact) news and all 2 Bulls News (medium impact), which are often speeches by FOMC Members. If are such important news within the described time span, then the News filter can turn off the EA during this time. I also recommend to avoid trading with SpotLight during holidays. Especially in the night scalping mode. I switch off the EA on that days. On public holidays, the spread value and the trading volume are often not ideal.

    4. Why does SpotLight generate trades with high SL and low TP values in night scalping mode? Answer: As with many night scalper EA is the high ratio of TP to SL strategy-related. Small TP values because the range is tight at night. Larger SL values, because not every open trade moves immediately in the desired direction. The trade needs a "certain space" in order to have the opportunity to move in the right direction. Another reason is the higher spread values at night. There is a higher volatility in the spread, especially at midnight broker time. If the SL values are too small, it will often happen that the open trades are stopped out. To avoid this unnecessary stop-out, the SL values are higher.

    5. Why do some of my trades differ from the trades of the comparison signals? Answer: With Forex Business, there is no uniform pricing for individual currency pairs. This means each broker generates (slightly) different OHLC charts. Smallest differences in the OHLC charts of the various brokers or various server from same broker can sometimes decide whether trades are triggered or not. One day once a broker has more trades, another day another broker generates more or less trades. This can vary slightly and is balanced in the long term between the different brokers.

    6. You mention to only trade on the evenings where there no high or medium impact news during the trading time. Is this for pair EURUSD only news for USD or EUR? Answer: Correct, in particular, I mean the important news to the respective pair. E.g. all USD and EUR News for EURUSD. But you are right, maybe it is important to consider news about other currencies. For example, important Japanese or China News at night can still affect open trades.

    7. Is VPS really necessary?  I mean how important is latency to the performance of the EA? Answer:  VPS is not necessarily important, but advantageous. I also use a normal german VPS provider. My latencies of the different brokers are between 25ms and 100ms. You see, normally latency is completely sufficient.

    8. If I want to optimize SpotLight further. How do I proceed? Answer: A further parameter optimization of the EA is possible and desirable. My default settings are good serve as examples. You can use default settings but there are certainly better and for each user individually more suitable settings. Please consider! If everyone trades with the same setting, they all win together, but all of them also lose as well. It is better to distribute the available trading capital and thus the general trading risk to several different settings, pairs and EA's. In the optimization you can start with the variation of the trading time and the various trend filters. With these parameters you can find suitable market conditions. Furthermore, the trades can be optimized by changing take profit and stop loss parameters. Likewise, the number of allowed trades and the allowed time interval between trades plays an important role. In the search for individual settings, the above grey-underlaid detailed description of some parameters will help you further.

    9. How can I learn more about trading with SpotLight? Answer: Current informations and an exchange of trading experience with SpotLight or my other EA can be obtained quickly and in time in my WhatsApp group. You can send me your mobile number and I will add you to the group. If further questions are open, you can also write me via MQL5.

    The operating instructions will be extended and supplemented in undefined intervals. 

    Date: 03.07.2020






    #swingtrading trendfollowing manual userguide nightscalping nightscalper spotlight daytrading
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