How to select MQL4 Live trading result for profitable automated Forex Trading - article from seekingalpha.com



MetaQuotes Language 4 or MQL4 is a programming language that comes with Metatrader 4 (MT4). It is use to write and test Forex Trading Strategy that can run on computer to trade automatically. Most of the Expert Advisor (EA) are using this and many have successfully code into profitable program for their trading needs. I will look at some of the factors when selecting EA from live trading results.

Return on Investment (ROI)

This is an old term used in many investment projects and it is used to determine how profitable the program is. Comparing to Stocks and unit trust performance which is between 10 to 20% annually, Forex trading gives higher ROI of 100 to 200% annually. This is due to the leverage of the currency and the 24 hours trading features which makes it easy to trade and small capital of 1:200 leverage required to trade and hold. This in the case of stocks, can be option warrant or contract for difference, but the holding power is still much less attractive then Forex.

banner Leverage

Some Forex broker accound provide 1:500 leverage, which means you only need $200 to hold on to a 100k full contract or $20 for mini lot 10K or $2 for micro lot trading (0.1 of mini lot or 0.01 of standard lot). You can execute 5 trades while still have the margin to carry on and earn potential $2000 profit with a 200 pips gain (1% to 2% currency value) compare to $50 for a 5% gain in stock and share assuming 10K capital used for both trading setup.

Duration of Live trading


In most case ROI is measured against monthly or annually. A good strategy Forex trading program will give 10% ROI monthly. Which equal to more then 100% anuually returns. But this is the average ROI, there may be months that is -10% and months that is +40%. Therefore, trading is almost looking at long term consistent profits, not short term gains. For live trading, at least 12 months of trading would gives a good ROI indicator of the program.

Profit Factor

This is important to any Forex trading program as it is a measure of its true abilities to trade and gain profit. Profit factor is measured by taking total profit winnings divide by total losses. Any number that is more then 1 will means that the program actually earn more then it lose. A good profit factor of 2 or 3 is desirable as it have to handle stop loss and bid-spread pip losses. This are 2 main problem for many Forex trading program and one of the most effective ways to counter it is to increase the profit factor. Anything less then 1.2 is consider no good.

Max Draw Down

Draw Down is common in Forex trading when the trades has not hit any stop loss. But comparing to Maximum Draw Down, it is the largest losses the account made include realized profit (loss) and unrealized profit (loss). Realized profit refer to trade that loss pips and are executed by the broker (Buy and then sell or Sell and then Buy). Unrealised profit is trade that is still holding on yet to let go. This is significant as it will affect your margin call calculation when you are running multiple trading programs. As a general rule is to have less then 15% or 20% draw down. You still have room to run another 2 more program to maximum your ROI while maintain your account margin.


source http://seekingalpha.com/instablog/1293871-sngerge/455901-how-to-choose-mql4-live-trading-result-for-profitable-forex-trading



Getting Started in Currency Trading is both an introduction and reference tool for beginning and intermediate foreign exchange (Forex) traders. This information-packed resource opens with a description of the Forex market and a section of clearly defined Forex terms with examples. You'll learn how to open your own trading account by following step-by-step instructions and numerous screen shots that show you what expect inside a dealer's trading platform. You'll walk through the physical process of placing and liquidating currency orders. Later chapters introduce various trading strategies and tactics in detail, along with some fundamental and technical analysis that will help you win in the exploding foreign exchange trading market.

Editorial Reviews

From the Back Cover

An accessible introduction to the burgeoning foreign exchange trading market

GETTING STARTED IN CURRENCY TRADING

The Foreign Exchange (FOREX) market is the largest financial market in the world, with a volume of over $1.5 trillion a day—more than three times the total amount of the stocks and futures markets combined. Up until 1995, FOREX trading was only available to banks and large multinational corporations, but today, thanks to the proliferation of the computer and a new era of Internet-based communication technologies, this highly profitable market is open to everyone. This huge international market offers unmatched potential for profitable trading in any market condition or any stage of the business cycle. All you need is a computer, a high-speed Internet connection, and the information contained within this book.
Getting Started in Currency Trading is both an introduction and reference guide for beginning and intermediate FOREX traders. This information-packed resource opens with a clear description of the FOREX market and a section of FOREX terms clearly defined with examples. After this brief overview, Getting Started in Currency Trading moves on to discuss:
  • The mechanics of FOREX trading—order types as well as order execution and confirmation
  • How fundamental and technical analysis can help you create successful trading strategies
  • How to find a reliable FOREX broker or open an online trading account
  • The psychology of trading the FOREX market
  • Advance trading topics, such as rollovers, hedging, and arbitrage
Filled with in-depth insight, practical advice, and numerous screen shots that illustrate what to expect inside a dealer's trading platform, Getting Started in Currency Trading will guide you through the complexities of FOREX trading and put you on the road to success.
Michael duane Archer has been an active commodity futures and FOREX trader for over thirty years. Mike has also worked in various registered advisory capacities, notably as a CTA (Commodity Trading Advisor) and as an Investment Advisor. He is currently CEO of CommTools, Inc., a corporation focusing on nonlinear solutions to trend forecasting, with a special emphasis on cellular automata models.

About the Author

Michael Duane Archer (Golden, CO) has been an active commodity futures and Forex trader for over thirty years. He has also worked in various advisory capacities, notably as a Commodity Trading Advisor and SEC registered Investment Advisor. He is currently CEO of CommTools, Inc., a think-tank focusing on cellular automata and complexity theory market forecasting solutions.
Jim L. Bickford is a twenty-seven-year software engineering veteran, technical analyst, and a very active FOREX day trader with an academic background in applied mathematics and statistics. He has numerous books to his credit and recently published Chart Plotting Algorithms for Technical Analysts.

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