AW Donchian Trend EA instructions in description – My Trading – 26 October 2024

MT5 version
👉 https://www.mql5.com/ru/market/product/121573

Strategies for opening positions:

1 Success Rating

A buy signal was received with a signal success rating greater than or equal to 70%. If the indicator is less than you specify, the advisor will not open an order. You can specify any percentage of the rating for opening orders, but we recommend using a percentage of at least 70 in order to avoid a large number of false signals. When using a grid strategy and using additional filters, the success rating value can be reduced.

The “Success Rate” variable is located in the input settings in the “MAIN SETTINGS” section.

2 Opening orders on a new signal or in the direction of the trend

The advisor has a new built-in function for opening more orders.

• If in the variable ” First order on new signal only”   set the option “TRUE”, then the adviser will open new orders only when a new signal is received from the indicator. That is, the adviser trades once per signal. If you enabled the ability to trade grids, then only one grid can open. (Less trades – as in the screenshot below)

• If in the variable “First order on new signal only” set the option “False”, then the adviser will open new orders immediately after the previous ones are closed throughout the entire trend direction. When one basket is closed (when using grids), or one order, even in the absence of a new signal, new orders will be opened according to the current trend. (More trades – as in the screenshot below)

3 Trading in two directions simultaneously or in turn.

The advisor has a built-in ability to work simultaneously in both directions, regulated by a variable “Can EA work in both directions at the same time”. If you select “true”, if there are already open orders in one direction, the adviser will be able to trade in both directions. In this case, both directions of orders will be closed independently of each other. (Simultaneously open transactions in both directions – in the screenshot below)

If you disable the function, the adviser will first trade in one direction. And only after AW Donchian Trend EA will close orders in this direction, then it will be able to open new orders in the opposite direction. Both directions of orders will be closed independently of each other. In the “false” mode, the adviser will trade only in one direction, opening another direction is possible only when the current one is closed. (Simultaneously open transactions only in one direction – in the screenshot below)

4 Limitation for opening no more than one order per candle.

Limitation for opening no more than one order per candle, or work without limitation. When choosing the “false” option, the adviser opens new orders as soon as a signal for opening is received. When choosing the “true” option, the adviser opens no more than one order of one direction per candle.

The limitation can be useful:

• Avoidance of overtrading: Without a limit, the EA can open multiple orders on a single candlestick, which leads to excessive risk and significant costs. For example, during a sharp up-and-down price movement, multiple orders can be opened on a single candlestick, which increases fees and reduces efficiency.
• Reduced Risk of Loss: When opening multiple orders on a single candle, the risk of each order is added together. Limiting helps reduce risk by ensuring that each trade is based on the unique market data of each new candle.
• Optimizing capital usage: Opening multiple orders on one candle can be very taxing on your deposit, especially when using a large volume, which limits the opportunities for subsequent trades on other signals.

Disabling the limitation may have its advantages depending on the strategy and market conditions. In some cases, disabling this limitation allows for more flexibility in responding to market changes and opening up additional profit opportunities.

Potential benefits of disabling:

• Increased Profit Potential: During periods of strong movements or high volatility, if only one order is opened per candle, additional opportunities are missed. Disabling the limit allows you to capture more profitable entry points, increasing your chances of making a profit.
• React quickly to trend changes: If the trend changes quickly, being able to open multiple trades in short periods of time can help you quickly reverse positions and take advantage of the new direction of movement.

5 “ Use additional Donchian Trend filtering”

Pluggable multi-timeframe and multi-period trend filter. Using an additional trend filter when trading is relevant for several reasons, as it allows you to more accurately determine the main direction of the market and increase the effectiveness of trading decisions. This technique combines analysis on different time intervals to avoid false signals and improve the accuracy of market entries.

On lower timeframes (such as M15 or M5) or with a low indicator period, market noise and false signals are common. The additional filter helps to ignore these signals if they contradict the trend on higher timeframes. For example, if a sell signal appears on a minute chart, but the trend is up on an hourly chart, a trader can ignore this signal and thus avoid losses.

Usage variations:  

• Filtering by higher timeframe. The entry point uses the current chart timeframe. For filtering, you need to use a larger timeframe. Orders will only be opened when two signals match.
• Filtering by a stricter indicator period. For the entry point, the standard indicator period of 24 is used. For filtering, a larger period is set, for example 40. In this case, orders will also be opened only when two signals match.
• Filtering by timeframe and period. For filtering, you can set both a larger timeframe and a larger period at the same time. This may be relevant for symbols with high volatility.

The gif shows an example of using a multi-timeframe filter, it is clear that when there is a difference in the direction of the indicators, the signals on the current timeframe are ignored. And when the signals match, the advisor makes transactions.

Variations for closing orders:

1 Take Profit Closing: Setting up the TakeProfit strategy.

“The TakeProfit function is a tool for automatically closing a position when a pre-set profit level is reached. It allows you to lock in profit when the price reaches the target value. The main task of the function is to ensure that the position is closed at the right time to prevent a price rollback and loss of earned profit.

TakeProfit can be set for each order individually or for the entire position, depending on the strategy. There are several options for using TakeProfit:

2 Closings on Trailing

The trailing order closing algorithm is a function that allows you to automatically pull stop-loss orders behind the price during favorable market movement.

The function is enabled when the price passes the distance specified in the variable “Trailing Start in points”. Once this distance is reached, the stop loss starts following the price at a distance specified in the variable “Trailing Step in points”. As the price continues to move in one direction, the stop loss will be automatically pulled up, protecting the accumulated profit.

If the price reverses and reaches the stop-loss level, the order is closed, locking in profit at the level set by the last trailing stop value. This feature allows you to minimize losses and preserve profits without requiring manual intervention, especially in dynamic markets.

3 Closing by StopLoss

The StopLoss function is a tool for automatically closing a losing position when a pre-set loss level is reached. The main purpose of StopLoss is to limit potential losses and protect the trader’s capital in the event of unfavorable market movement. As with TakeProfit, StopLoss can be set individually for each order or for the entire position. There are several options for the StopLoss function:

• Exit on opposite signal — Closing a position when the trend reverses or when an opposite trading signal appears. This option is useful for dynamic strategies, where the key criterion is a change in the trend direction. As soon as the advisor receives a reversal signal, the order is automatically closed.
• Use SL in Points — Using a fixed StopLoss in points for each order. When activating this function, you must set the StopLoss size in the “StopLoss in Points (if used)” variable. The order will be closed automatically as soon as the price passes the set number of points against the position.
• Use SL from Indicator — Using StopLoss based on Donchian Trend indicator signals. In this case, StopLoss levels are determined based on the analysis of indicator data, which allows flexible adaptation of protective levels depending on the market condition and trend behavior.
• Without StopLoss — Operation mode without using StopLoss. In this case, the advisor does not set protective levels to limit losses, for strategies with alternative risk management methods or during aggressive trading.

Additional features:

1 Breakeven

The breakeven algorithm is a function that allows you to move stop-loss orders to the breakeven zone. This happens when the price moves a specified number of points in the positive direction from the initial entry point of the trade. The main purpose of the breakeven is to protect the profit already made and eliminate possible losses on the position.

When the breakeven function is activated, the stop loss is moved to the order opening level (or slightly higher to cover commissions and spread). Thus, if the price goes in the opposite direction, the trade will be closed at the breakeven price, which protects the deposit from losses.

The breakeven function is activated only if the position already has a positive floating profit and has passed the specified number of points. The advisor does not use breakeven if the position remains unprofitable or has not reached the required price movement level.

2 Automatic risk management setup