Advisor Traffic Light
The use of moving averages is very popular among traders; moreover, this simple tool has found its place in hundreds of different trading strategies and Forex advisors that are built on their basis.
However, to this day there is no clear answer as to what exactly is the optimal period for moving averages.
When the value increases, the signal partially lags and the short-term trend is completely ignored, and when small values are used, the tool completely ignores global trends, which leads to the appearance of a huge number of false signals on Forex.
However, the author of the “Traffic Light” advisor took a completely different path, since he managed to build an algorithm based on the moving average channel.
In addition to the channel itself, the advisor uses three more moving averages with different periods, which allow the robot to evaluate the medium-term, long-term and short-term trends.
Advisor Svetofor is a fully automatic trading expert based on trend strategy called "Traffic Light", which in turn is an example of the harmonious use of several moving averages at the same time.
The strategy itself, like the advisor, is not picky about a specific time frame, but at the same time, the effectiveness of trend indicators truly manifests itself on higher time frames, namely from the hourly and higher.
The Traffic Light robot can be used on absolutely all types of assets, since the trend phase is inherent in all currency pairs, stocks or indices, which makes the robot multi-currency.
Installing the advisor
The “Traffic Light” advisor became public domain in 2016, when its author publicly posted his brainchild in the official MT4 library, moreover, he accepted comments and made changes to improve the robot.
Therefore, now the expert can be installed in two ways, namely according to the standard scheme through the data catalog, or through the library directly in MT4 itself.
To install through the library, launch your trading terminal and go to the “Terminal” panel. Then go to the “Library” tab and, using simple sorting, enable the display of only advisors.
Find the name of the robot in the list and, as shown in the image, download the file using the additional menu.
If installation via the library caused difficulties for some reason, you can install the advisor using the standard scheme.
To do this, you will need to download the robot file at the end of the article, and then drop it into the appropriate folder in the data directory, as shown in the article at the link http://time-forex.com/praktika/ustanovka-indikatora-ili-sovetnika.
After updating the trading terminal in the “Navigator” panel or restarting it, the Traffic Light advisor will appear in the list of robots, and in order for it to start trading, just drag the name of the robot onto the hourly or higher chart of the currency pair .
Trading strategy.
Settings The advisor is based on the “Traffic Light” indicator strategy, which is entirely built on moving averages alone.
So, the robot initially determines the direction of the trend using the moving average channel, after which it waits for three moving averages with different periods to line up one after another.
This signal indicates a strong trend, since the short-term, medium-term and long-term trend are directed in the same direction.
The advisor does not use a martingale, but clearly sets a stop order and profit for positions.
The “Traffic Light” advisor contains many variables that allow you to completely edit the algorithm of the advisor, as well as carry out its very deep optimization.
So in the lines red iMA, yellow iMA, green iMA, blue iMA you can change the periods of the four moving averages on which the trading strategy is based.
The advisor supports two options for calculating a trading lot.
So, in order to use the dynamic calculation, you need to indicate in the “Risk per transaction” line the percentage that you are willing to risk per position. In this case, you can change the stop order and profit in the lines with the corresponding name. The EA also has a built-in trailing stop based on the moving average.
Testing the robot
It is worth noting that at the beginning of 2018, the settings were clearly outdated.
As an experiment, we decided to conduct experimental testing for 2017 with default settings on the clock chart of the Euro/Dollar currency pair. What came out of this, look at the image below:
As you can see, the test result with outdated settings turned out to be more than predicted.
Therefore, a simple optimization was carried out according to the main parameters, after which repeated testing was launched.
The test result after optimization is shown below:
In conclusion, it is worth noting that the “Traffic Light” advisor is a conservative trend robot that has enormous potential and at the same time can be successfully applied to accounts with a small amount of capital.
Download the Traffic Light advisor .