Advisor to absorption

I think every trader sooner or later begins to strive for a professional level of trading, at which there is no need to use indicators to make profitable trades.

Yes, trading without indicators, just by analyzing the price. To support this, there's a book on Japanese candlesticks, which lays out various candlestick patterns that can indicate a trend reversal.

Japanese candlesticks can tell you a lot, and one of the most popular patterns used by traders is the engulfing pattern. The idea behind this pattern is that if a newly formed candlestick is large enough to engulf the previous candlestick and its shadows, a new trend has begun to form in the market.

The Engulfing pattern formed the basis for the development of this trading expert advisor. It was developed by a Russian trader, and the advisor's name naturally reflects the pattern whose algorithm underlies it. Japanese candlestick analysis is best performed on higher timeframes, so it is recommended to use the expert advisor on hourly charts and higher.

The currency pair can be any, but, according to the author, the pattern produces optimal results on the GBP/USD currency pair.

Before you begin, you need to install the Expert Advisor in your Meta Trader 4 trading terminal. To do this, download the archive containing the Expert Advisor and, using your trading terminal's data directory, place the file in the Expert Advisor folder. After restarting the terminal, the tool should appear in the list of Expert Advisors, so to get started, simply drag the Expert Advisor onto the GBP/USD chart. You should see a settings window, which you'll learn about below:

 The expert's author didn't bother with adding a bunch of features to his creation, so the set of settings is as simple as the expert itself.

In the tf line, you can change the time frame in minutes used for pattern calculation. In the Lot line, you can specify the lot size the expert advisor will trade.

In the sl line you can change the size of the stop order, and in the tp line the size of the take profit.

In the "pts" line, you can set the absorption size in points. This means that if the new order is three points larger than the previous one, it is considered an absorption pattern. The Expert Advisor follows the stop order based on the Moving Average , the period of which you can change in the "per" settings line.

The author also added a martingale feature to the EA, which you can enable or disable in the "martingale" line. These are basically all the settings the author has included. Almost all parameters can be optimized, especially SL, TP, and PTS.

I decided to conduct the first test of the expert advisor on the GBP/USD currency pair on an hourly time frame. The testing period was from January 1, 2015, to July 1, 2015. I left all the settings at default, and you can see the test results in the image below:

I decided to run a second test on the same currency pair, but this time I enabled the martingale . The test results are shown in the image below:

Based on the test results, we can conclude that the expert advisor is profitable, and the engulfing pattern remains relevant to this day. This expert advisor will be a real find for those looking for Japanese candlestick-based experts. I believe the expert advisor is worth considering, so I recommend testing it on a cent account with InstaForex or Amarkets . Thank you for your attention, and good luck!

Download the "Engulfing" expert advisor.