TRADER’S GUIDE:
I decided, in order to share more information about my routine of using the EA, to write a short guide. I hope to be as clear and concise as possible and to satisfy all the requests and questions you may have.
First of all, let’s clarify what LL HighFrequencyTrading EA is.
It is an ExpertAdvisor developed exclusively for the MetaTrader5 platform, it allows the opening and closing of many positions in a very short time (depending on the setting).
The code was written to perform entry, management and closing of positions in the shortest time and with the least possible latency.
These are the two fundamental requirements for this type of system that is able to open and close many positions in the shortest possible time.
We can define it as a Semi-Automatic system as it is not designed to be a “set and forget” and the direction of opening of the trades must be set each time by the trader before being launched.
For this reason the EA backtest is not used to measure performance, as the very nature of the EA does not allow it to be tested for a long period.
If you want to test the behavior of the EA, you can use the backtester in a single daily phase, so that you have an idea of the behavior of the EA in that range.
If, however, you test the EA over several days you will never get positive backtest results, as the trend of every financial instrument is never only Long or Short and changes continuously (there may also be news, economic events that upset the intraday market).
So here are my tips for using EA correctly and making the most of its potential.
Part 1: Market Analysis
The first step is to identify the EA’s trading direction.
To do this, there is no more correct methodology than another, to tell the truth, analysis is often a very subjective step, even if it is based on the interpretation of data, graphs and indicators.
The following is the approach that I personally use to identify as quickly as possible and with almost zero margins of error.
A XAUUSD H4 chart set up to easily recognize the trend
We will use a chart with a timeframe of H1 or H4 (your choice) and we will set it in the following way:
- replace default candlesticks (making them colorless) with Heikin Ashi candlesticks indicator
- add to the chart 18 different ExponentialMovingAverage (I use “MovingAverage with colors” indicator) and set sequentially the Period of each EMA in this way (5,10,15,20,25…to 90)
- add to the chart the ParabolicSAR (I use “Color Parabolic SAR” indicator) and set in this way (Step 0.002 | Size 0.02)
- add to the chart the HalfTrend indicator (I use “half-trend-buy-sell-indicator”) and set in this way (Amplitude 5 – Make it colorless except the Arrows)
In this way, when all the indicators agree with each other, visually there will be only one color (green for buy, red for sell) and it will be very easy to identify the main direction of the market.
If even just one of the indicators does not agree with another, even just an average (often the fastest is the most sensitive to sudden changes) I stay out because an intraday correction could be underway, or the beginning of a change in the main trend.
I do not intend to remain bottled up inside a wrong belief that can turn into a more than certain loss.
Furthermore, hoping that the market will turn in our favor or trying to anticipate a further market move 2/3 times translates into a loss.
The market cannot be beaten like this, in reality the market cannot be beaten and that’s it, we “small fish” can follow the big wave and navigate it by sight only when it is well formed and overwhelming.
The slightest uncertainty can cost you a lot of money.
I am of the opinion that staying inside the market at all costs and always without any doctor prescribing it is not an obligation.
In fact I am happier when I stay outside in front of an unclear scenario, rather than staying inside with the hope that it will then turn in my favor.
In summary, in the example above, the trading direction is BUY/LONG. Fast, clear and unambiguous.
Part 2: Setting up the EA for trading
An example of Aggressive setting that I use on XAUUSD
Once we have identified the trading direction we can add the EA to our chart (or even to another one with the same symbol).
The timeframe of the chart is irrelevant since the EA works independently at each tick and on the broker server response.
The first in the list of EA input settings is the Direction Trade, so we will select the direction according to our analysis that we will have done.
Next we can select the Lotsize for each order, here the issue is related to the size of the balance available in the account.
I tell you right away that using lots larger than 0.01 is a gamble as the EA set aggressively can open up to 200 positions at the same time, these can temporarily bring temporary DrawDown or in some cases even the SL.
My advice is not to increase the lots, unless you have really large balances available (I use 0.01 on over 10k of balance, to get an idea).
Distance, TP, SL and MaxOrders settings radically change the behavior of the EA, allowing the system to operate more or less frequently.
Distance regulates the minimum distance that must elapse between one position and another, the EA will take into account both the upper and lower distance of each position already opened.
The distance is expressed in points and if the minimum value (1) is entered it will allow the EA to operate continuously practically at almost every tick movement.
My suggestion is to stick to low distance values, but not too low, especially at the beginning. Values between 3/5/10 are to be considered medium aggressive. Inserting distances greater than 25/50 points means distorting the behavior of the EA and making it a slower scalper (but not less interesting for that).
MaxOrders is self-explanatory, here you must choose how many operations can be inserted by the EA. Too low a number can make it more difficult for the EA to recover losing orders, just as a high or maximum number can allow you to open a lot of orders in a few minutes, reaching profit or SL sooner.
Personally I prefer to free orders to the maximum and limit the number of positions by control on the Free Margin or the possible risk through the SL.
TP and SL are part of the risk-return decision. They must be regulated by the trader according to his/her Money Management, I certainly can’t be the one to tell you how much to risk.
However, I can tell you which approach seems most effective to me.
My SL is always calculated on 25% of my balance availability. It is a risk that I can take, in the event that this happens, and that I can recover with the performances that the EA returns daily.
So far it has never happened to take two consecutive ones in the same month, this does not mean that this cannot happen, but you have to hold on to something, I stick to my personal experience in statistical terms.
It happened to me to remain in DDs of over a thousand € for several minutes and to have to bear them for a short time, as the strength of the main trend is so strong that it brings the correction back to the main axis.
I prefer to leave the EA free to vent up to this 25%, beyond which I cut everything and close, accepting that I have been beaten by the market. Trading is also a gamble after all and this must be accepted from the beginning.
FAQs:
Q: Can I use LL HFT EA with a trade copier?
A: If you want to use a trade copier maybe you can obtain positive results, but you will introduce latency to any execution, which is counterproductive to the strategy itself.
Q: Do you publish other versions of your EA for other trading platforms (MT4 for example)?
A: LL HFT EA is designed exclusively to work with MT5, it’s not available on other platforms.
Q: Would your HFT EA work to pass challenges of prop firms that allow HFT EAs in their challenge phase?
A: LL HFT EA is designed to work with real trading MT5 accounts. Maybe can pass PropFirm with appropriate setting and market conditions, but it’s not coded with this specific purpose.
Q: I backtested it and it blew the account because it opened long positions and the price got into a very prolonged downtrend. Can the user somehow change trading direction or is one stuck with the open trades without any way out after trend reversal?
A: The MT5 backtester is not used to measure the performance of the EA, as the very nature of the EA does not allow it to be tested for a long period. It’s not an automatic system, in fact the trading direction must be decided at the beginning by the trader. If you want to test the behavior of the EA, you can use the backtester in a single daily phase, so that you have an idea of the behavior of the EA in that range.
Q: What is the minimum account size and leverage you recommend for this EA?
A: You can use with every balance above 5000$ with medium risk. Low risk only over 10.000$ balance. Anything below 5000$ is considered high risk by me (This is not a financial advice, money management is personal).
Q: Do you have any recommended broker? Does it require very low spreads?
A: Need raw spread account (low spread with commission).
Q: Does the EA works with a cent account?
A: Cent account isn’t good due to high spreads, you will get loss in the long run due to this. Better to use a Raw Spread account.
Q: Do you provide set files?
A: You can find the setfiles I use everyday on my account only on this page, right at the end of the post. I’ll update it when needed.
Q: What are your favourite assets and timeframes to run this EA?
A: My favourite asset is XAUUSD (Gold). I trade it almost everyday (only if market is trending on H1/H4 timeframe, only for 1/2 hours max, after London opening session time. Sometimes I stop the EA after 20/30 minutes of succesfull trading.
SET FILES: