MT5 Auto Trader for EMA Strategy

1. Introduction

1.1. Purpose

The purpose of this EA is to automate the EMA crossover strategy to achieve consistent trading results in the Forex market. Users will manually input the two EMA periods to allow for testing various combinations and identifying a successful trading system.

1.2. Scope

The EA will operate on major currency pairs, indices, and stocks across multiple timeframes to enable testing of different timeframes.

2. Functional Requirements

2.1. Trading Strategy

Entry Conditions

• Buy Signal: A buy order is initiated when the slow EMA crosses above the fast EMA.
• Sell Signal: A sell order is initiated when the slow EMA crosses below the fast EMA.
• Time Window: Include a time window when entries can be taken. This will allow trades to be initiated only within specific hours of the day.

Exit Conditions

• Close Buy Position: The buy position is closed when the slow EMA crosses below the fast EMA.
• Close Sell Position: The sell position is closed when the slow EMA crosses above the fast EMA.
• Exits Based on Signal: Exits do not depend on the time of day. They can happen only when an exit signal is given.
• Negative Stop Loss Trailing: Include a negative stop loss trailing until an opposite signal is given. Exit the trade when an opposite signal occurs.

Breakeven Condition

• Breakeven:

Breakeven will have two conditions that a user will have to set in the settings section. Below are the conditions. All will be tested to have a better setting that is profitable,

• Condition 1: Include a breakeven condition to be set at the close of the buy or sell candle when 3 consecutive candles close above or below the crossover, depending on whether it is a buy or sell.
• Condition 2: Include a breakeven condition to be set after a number of pips have been covered.

Stop Loss Placement

• Stop Loss at Candle Low: Set a stop loss at the low of the candle that provided the signal.
• Stop Loss Distance: Allow users to specify the distance from the signal candle low to the stop loss in pips.
• Breakeven at Signal Entry: If the stop loss moves a certain number of pips, set the breakeven to the entry point of the signal.
• Adjustable Stop Loss: Be able to adjust the stop loss, especially when there is news or other market events that may impact trading conditions.

Order Types

• Market Orders

2.2. Risk Management

• Position Sizing: The position size will be 1% of the account balance per trade.
• Stop Loss: The stop loss is marked as the last point in the buying signal. However, it must meet a certain number of pips. If it moves a certain number of pips, set the breakeven to the entry point of the signal.
• Adjustable Stop Loss: Be able to adjust the stop loss, especially when there is news or other market events that may impact trading conditions.
• Take Profit: Fixed take profit at 100 pips.
• Trailing Stop: No trailing stop will be used.

2.3. Money Management

• Lot Size: Set the lot size for each trade based on user input or calculated based on the position size percentage.
• Maximum Drawdown: 30% of the account balance.
• Maximum Number of Open Positions: Only one position (either long or short) will be open at any time.

2.4. Trade Management

• Hedging: Hedging will not be used.
• Martingale or Grid Strategies: These strategies will not be used.

3. Technical Requirements

3.1. Platform

MetaTrader 5 (MT5)

3.2. Programming Language

MQL5

3.3. Performance

• Execution Speed: Orders should be executed in less than a second, if possible.
• Resource Usage: The EA should minimize CPU and memory usage.

4. Non-Functional Requirements

4.1. Reliability

• Uptime: The EA should maintain 99.9% uptime.
• Error Handling: The EA should handle errors gracefully and log them for further analysis.

4.2. Maintainability

• Code Documentation: The code should be well-documented with comments explaining the logic.
• Modularity: The code should be modular to facilitate future updates or changes.

4.3. Security

• Access Control: Only the admin can modify EA settings.
• Data Protection: Sensitive data should be handled securely.

5. User Interface Requirements

5.1. Inputs

• Indicator Parameters:
• Fast EMA period: Varies
• Slow EMA period: Varies
• Risk Parameters:
• Position size (percentage of account balance): 1%
• Stop loss: User-defined distance in pips from the signal candle low.
• Take profit: 100 pips
• Trade Parameters:
• Maximum drawdown: 30%
• Maximum number of open positions: 1
• Lot size: User-defined or calculated based on the position size percentage.
• Time Window Parameters:
• Start Time: The start of the time window for taking entries.
• End Time: The end of the time window for taking entries.

5.2. Outputs

• Trade Logs: Detailed logs of each trade, including entry and exit points, position size, and profit/loss.
• Performance Reports: Daily performance reports detailing key metrics such as profit factor, drawdown, and win rate.

6. Testing Requirements

6.1. Backtesting

• Historical Data: Use historical data from the past 2 years.
• Performance Metrics: Evaluate metrics such as profit factor, drawdown, win rate, and total net profit.

6.2. Forward Testing

• Demo Account Testing: Test the EA on a demo account for 3 months to validate performance.
• Live Testing: Test the EA in a live environment with limited funds for 1 month.

7. Documentation Requirements

7.1. User Guide

• Installation Instructions: Step-by-step guide on how to install the EA on MT5.
• Configuration Guide: Detailed instructions on how to configure the EA’s settings.
• Usage Guide: How to start and stop the EA, and interpret its outputs.

7.2. Technical Documentation

• Code Documentation: Include in-line comments and explanations within the code.