Opening Range Breakout EA Systems – Analysis & Forecasts – 12 December 2022

The Opening Range Breakout EA

This document serves as a manual for the EA https://www.mql5.com/en/market/product/90502/ and updated when necessary.

Important note:
please Don’t Use default settings in EA, those settings are not designed to be used for real trading. EAs listed on the MQL5 market must undergo stick testing criteria across multiple instruments and timeframes, and while this is good for testing the EA’s logic and code, it also precludes listing EAs designed to work on such specific instruments and timeframes. One. So the default settings EA is designed to pass these tests on hourly and daily timeframes, it is not designed to run, but to pass verification. 🙂

The EA is designed to run on the M5 timeframe as it tracks the opening range action on major stock indices.

What’s in this blog post:

1. Not the strategy, it is listed in another post, strategy guide on how to trade EA can be found here: https://www.mql5.com/en/blogs/post/751229

2. A detailed list of all inputs and what they do and how they affect the trade.

How to use Range Breakout EA:

The EA can be customized to trade on any timeframe but M5 is recommended so it should be placed on the M5 timeframe. It can be set to trade at any time of the day, so it can also be used to trade other ranges in forex, such as the Asian session, or it can be used to trade just before news events. Declines before a news breakout happens. Test, test, test in Strategy Tester before you do anything on any other timeframe!

Finding Open Space for Frankfurt and New York:

The EA was created to trade on the Frankfurt and New York stock exchanges, so you need to tell when these times are. You may need to do this as brokers vary candle close times, and it can be tricky, but there is a very simple way to do this using a scale.

If you are using the EA to open Frankfurt at 9am (10am GMT), the New York open is at 9:30am (14:30pm GMT). Although your brokers are candlesticks, those times do not exist. For example, with broker Roboforex using UTC+2 candles (most brokers do now) open at 10:00 in Frankfurt and 16:30 in New York.

So let’s use volume to make sure we’ve got the right open time.

First open the DAX, DOW, NASDAQ etc. you want to trade.

Then right click on the chart and make sure you have the module checked in the General Properties tab as shown below.

You will now see your broker’s size shown below the chart. You can clearly see in my brokers chart that the volume on the DAX index doubles at 10:00 AM and often more.
Similarly, in US indices such as the NASDAQ in the example below, you’ll see volume increase at 16:30 on the chart at 2:30pm UK (9:30am NY).

This is the open space.

Inputs for EA:

Here I describe each input and what impact it has on trading activity. I strongly recommend that you put the EA in visual regression and play with these settings and see for yourself what happens. You can fine tune the EA to trade with high strike rate and small wins, low strike rate and big home run hits, and everything in between. Whether you personally want the EA to trade to help your personal account or pass the prop company rating will differ from the next trader, so see how it works and set it up to trade the way you want. Some are happy with proven long term margin of 30-50% drawdown, others can’t bear to lose more than 3-5 trades in a row without giving up, it matters who you are, even with an automated strategy, don’t’ EA on live account without fully understanding its logic and how it trades. Don’t add blindly.

Inputs:

The magic number – This should be unique to each instance of the EA so it knows which trade to manage. It will only manage trades opened with this number. If you want to run multiple versions of the strategy in the same tool, use multiple magic numbers in each instance.

— RISK AND OBJECTIVES —

Amount of money to risk per trade – Choose the amount of money in each position taken. This is based on your stop loss and the EA will automatically calculate the correct size based on how far the stop loss is. By default the EA will place the stop at the opposite end of the range unless you choose to use a fixed pip stop loss on the entries below.

Level 1,2 & 3 TP Multiplier (Percentage of Stop Loss) – These entries will calculate where to place your take profit for each position entered based on the stop loss.
For example: If you use 100 as an input, the EA will place your TP at a distance of 100% of your stop loss. If your stop loss is 30 pips, your take profit will be 30 pips.
If you input 150, you are asking the EA to place your take profit at 150% of your stop loss. So in the example of a 30 pip stop loss the take profit would be 45 pips.
If you don’t use take profit and want trailing stops, use 1000 as your entry for all three, the take profit will be far away, it will never be affected, and your trailing stop loss pattern will get you out. trades.

Do not use a fixed pip stop on the opposite range – As mentioned above, unless you set this input to true, the EA will automatically stop at the opposite end of the starting range for each level.
In fact, you can choose your stop at a certain distance for each trade. Some brokers quote in mini and others in micro increments, so you need to check the actual distance you enter here, but it’s usually 30 or 300 for a 30 pip stop. However some brokers like Oxy will quote in 1000 pips increments so check visually on your chart and adjust as necessary.

Standard pip stop to use – This is where you enter the amount for the above entry when using a fixed pip stop loss.

Auto exit at balance percentage – The EA should automatically close all positions when a target percentage of your account balance is reached. For example, if you have a $10,000 account and select a 1% profit target, when the total of all open positions reaches $100, the EA will close the trade and bank the profit for you. This setup is great for those who want to master prop company ratings and earn small fixed gains.

Profit percentage target – This is where you enter the target from the input above as a percentage of your account balance.

— Trading Hours —

Limit Start Time – This is the time you want to start tracking the EA range. If using an EA to trade indices, this is usually either the Frankfurt open or the New York open.

Range 1, 2 & 3 end times – These are the 3 breakout times where the EA will place its pending orders ready to break the market. If you select 10:00 as the open time (Frankfurt on my broker) and want to breakout high or low on the 5. 10 and 15 minute bars, you enter 10:05, 10:10 and 10:15. respectively in the inputs. A good strategy is to use multiple entries so you start working and adding to breakouts that multiply profits.

Stop trading hours – This is when the EA cancels pending orders and stops taking untriggered trades. This is designed to ensure that we don’t hang around old orders that could trigger late in the day in the event of a breakout in one direction. If it doesn’t work within the first two hours after it breaks, it’s better to remove the orders.

Take Range Breakout 1,2 & 3 – Choose how many breakout levels you want to trade. Trade up to 3 breakout patterns/levels or just one, remember that the more you add to a successful breakout, the more you can make, but if it’s out of all 3, then the losses will be higher. Test what works best for you.

— Trailing Stops —

Activate on bar close (tick otherwise) – You can choose to trigger your breakeven and trailing stop settings only when a bar/candle closes (which is the default) or every tick. Backtesting shows that closing the bar can be very effective as it sometimes filters out the breakout action on the candle, stopping you and continuing to run. If you use a tick instead, you will exit quickly if a reversal occurs and the price moves against you.

Use a trailing stop loss – Set whether or not to use trailing stop loss.

The distance to the track is stopped – This is how far the EA needs to be in profit before placing your stop. It will continue in 1 pip increments when activated.

Use a break even stop loss – Set whether to move stops to breakeven to protect your trades that have moved towards profit.

The distance that triggers the gap – How profitable you want your trade to be before breakeven is triggered.

Use a moving average as a trailing stop loss – Use trailing stop loss based on SMA moving average rather than trailing stop. This will get you out of your trade when the price closes below the moving average you choose on the next entry.

Use moving averages – This is where you set which SMA you want to use. The 9 SMA is usually a good choice to capture large parts of a trend move on a 5 minute time frame but experiment.

— Add to Singles —

Add to single trade when in profit – Taking multiple breakouts automatically adds working breakouts for you, but if a signal breakout is taken, the EA can add an additional position to your winners after a certain number of pips to increase your earnings. If set to true here, the EA will do that, but it will only add once if only one live trade is running.

The distance before the add-on is ordered – The distance it must be from the initial entry price before adding another position.