Opening Range Breakout EA Version 2 Settings – Analytics & Forecasts – 3 January 2023

The Opening Range Breakout EA Version 2

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

IMPORTANT NOTE:
Please DO NOT use the default settings in the EA, those settings are not designed to be used for real trading. EAs listed on the MQL5 marketplace have to undergo stict testing criteria on multiple instruments and timeframes and while this is good for testing the logic and code of an EA this hinders being able to list EAs that are designed to work on specific instruments and timeframes like this one. So the default settings are designed to get the EA to pass these tests on hourly and daily timeframes which it’s not designed to run on but has to pass validation for. 🙂

The EA is designed to be run on the M5 timeframe as it monitors opening range activity on the major stock indices. It is to be used on stock indices as they have a fixed open where volatility is guaranteed and this EAs edge exploits that, it has not been tested on any other instrument and is not designed to work on anything else but feel free to test away if you wish.

WHAT’S IN THIS BLOG POST:

1. NOT the strategy, that’s listed in another post, a strategy guide to how the EA trades can be found here: https://www.mql5.com/en/blogs/post/751229

2. A detailed list of all the inputs and what they do as well as how they affect trading.

HOW TO USE THE RANGE BREAKOUT EA:

The EA should be placed on the M5 timeframe on any stock index such as the DAX, NASDAQ, DOW, S&P500 etc….. TEST, TEST, TEST in the strategy tester before you do anything on any other timeframe if you wish to try but no other timeframe other than M5 has been tested so do so at your own risk!

Finding the open for Frankfurt and New York:

The EA was developed to trade the open of the Frankfurt and New York stock exchanges so you need to tell it when these times are. As brokers candle close times wil vary you will need to work this out and it can be tricky but there is a very simple way to do this using volume.

If you are using the EA to trade the Frankfurt open that is at 9am (8am GMT), the New York open is 9:30am (14:30pm GMT). Your brokers candles however will likely not be those times. For example with the broker Roboforex who uses UTC+2 candles (which the majority of brokers now do) will have the open in Frankfurt at 10:00 and New York at 16:30.

So lets use volume to confirm we’ve got the right open time.

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

Then right click on the chart and make sure you have volume checked in the common properties tab as shown below.

Now you will see the volume from your broker shown on the bottom of the chart. You can clearly see at 10:00am on the DAX index on my brokers chart that the volume doubles and is often even larger.
Likewise on the US indices like the NASDAQ in the example below you will see a substantial increase in volume at 16:30 on the chart which is 2:30pm UK (9:30am NY).

This is the open.

INPUTS FOR THE EA:

Here I’ll detail every input and what impact it has on trading activity. I would strongly recommend you put the EA in the visual backtest, play with these settings and see for yourself what happens. You can fine tune the EA to trade with a high strike rate and small wins, low strike rate and huge home run wins and everything in between. How YOU PERSONALLY want the EA to trade to help with either your personal account or passing a prop firm evaluation will differ from the next trader so set it to trade how YOU want it by seeing how it works. Some people are happy with 30-50% drawdown on a proven long term edge, others can’t stand losing more than 3-5 trades in a row without giving up, who you are is important, even with an automated strategy, don’t ever blindly add an EA to a live account without FULLY understanding the logic and how it trades.

INPUTS:

— ACCOUNTS + LIMITS —

This section has 2 functions. It allows you to monitor balances and set targets for the EA to reach on a daily basis as well as controlling daily losses. This section was introduced specifically for those looking to pass prop firm evaluations so they can set realistic daily goals while ensuring the EA will not blow their evaluation if a losing run is experienced by closing out all positions.

Account starting balance – (NUMBER INPUT) – Set the starting balance of the account here. This is used in calculations shown on the info panel if you have it turned on.

Profit target to reach – (NUMBER INPUT) – Set the target for the account to reach. This is used to calculate how far you have to go and is displayed on the info panel. The EA does NOT use this figure for anything but calculations to be displayed.

Daily profit target to stop trading – (NUMBER INPUT) – Set the daily profit target you would like the EA to achieve each day. This setting is important and server 2 purposes.

1. If you set the input below (Close all trades and stop when target hit) to TRUE the EA will close all open positions and cancel pending orders when this figure is achieved and stop trading for the day. This is particularly useful for funded accounts where you want small steady growth or evaluations on prop accounts where you have a minimum number of trading days and you can divide your target by the number of days and enter that figure here.
2. If you set the input below (Close all trades and stop when target hit) to FALSE the EA will just tighten up your stops (more on this input further down) and will make sure that your profit is locked in a little tighter so as not to lose it all on a sudden spike against you. NOTE: This also switches to trail on tick mode if you have on candle close selected.
3. Regardless of whether you set the input below to TRUE or FALSE the EA will stop trading and take no further trades today when this target is hit. If you want the EA to trade constantly for you then you need to set this figure very high.

Close all trades and stop when target hit – (TRUE/FALSE) – If set to TRUE the EA will monitor the closed profit and open floating profit and then close all positions when your overall profit target is reached. It will place no more pending orders today but will not cancel off existing pending orders that may be in place.

Cancel pendings and stop if target hit – (TRUE/FALSE) – If set to true the EA will check every time a trade is closed and see if the profit target for the day is reached (did that last trade I closed achieve my overall target for today). If so it will cancel pending orders and stop for the day.

Close everything and stop at this loss – (NEGATIVE NUMBER INPUT) – Here you enter a negative number (amount) that you want the EA to stop trading at if reached. e.g. if you enter -2500 the EA will close out all trades that are open and cancel pending orders when your combined open and closed trades reach this figure. This is for those wanting to set a daily loss limit, specifically if you have a prop firm evaluation or simply want to stop bad losing runs which may occur on particularly choppy days.

— RISK & TARGETS —

IMPORTANT NOTE: Only use one of the options below. If you set more than one to TRUE the EA will take multiple trades.

Use a fixed lot size and percent of OR stop – (TRUE/FALSE) – If set to true the EA will place a pending order at the highs and lows of the opening ranges using a fixed lot size you enter in the next input. The stop loss will be placed at a percentage of the opening range it is trading.

Fixed lot size to use – (NUMBER INPUT) – This is the fixed lot size you would like the EA to use when taking trades using the input above.

Use money risk and percentage or OR stop –  (TRUE/FALSE) – If set to true the EA will place a pending order at the highs and lows of the opening ranges and calculate the lot size for you based on how far away the stop loss is using the risk amount you specify in the input below. The stop loss will be placed at a percentage of the opening range it is trading.  

Amount of money to risk per trade – (NUMBER INPUT) – Select the amount of money to risk on each position taken. This is based on your stop loss and the EA will automatically calculate the correct lot sizing based on how far away the stop loss is placed.

Percent of opening range to use – (NUMBER INPUT) –  Enter the percentage away from the pending order you want your stop placed based on the opening range. e.g. if you set the percent of opening range to 100 it will place a stop at the total size of the opening range (the opposite end of the range), if you set it to 50 it will place the stop half way of the opening range. So if the opening range is 40 pips and you selected 50% as your input here the stop would be placed at 20 pips from the pending order.

Use a fixed pip stop and money amount risk – (TRUE/FALSE) – If set to true the EA will use a fixed stop loss you specify in the input below and the lot size will be calculated based on the amount of money you want to risk and distance to your stop loss.

Fixed pip stop to use – (NUMBER INPUT) – This is where you enter the amount for the above input when using a fixed pip stop loss.

Position 1,2 & 3 TP multiplier (percentage of stop loss) – These inputs will calculate where to place your take profits for each position entered based on the stop loss. 
For example: If you use 100 as the input the EA will place your TP 100% of the distance of your stop loss. So if your stop loss is 30 pips your take profit will be 30 pips.
Is you input 150 then 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 would prefer to not use a take profit and just trail the stops then just use 1000 as your input for all three and the take profit will be so far away it will never get hit and your trailing stop loss method will get you out of the trades.

Auto exit at percentage of balance – (TRUE/FALSE) – Have the EA automatically close all positions when a percentage target is reached which is a percentage of your account balance. For example if you have a $10,000 account and select a 1% profit target when the total of all positions open reaches $100 the EA will close the trades and bank the profit for you. This setting is great for passing prop firm evaluations and for those that want to make small consistent gains.

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

— TRADING RANGES & TIMES —

Minimum opening range – (NUMBER INPUT) – This is the minimum size of the opening range for a trade to take place. Use this to filter out tiny opens where there may be little or no trading volume.

Maximum opening range – (NUMBER INPUT) – This is the maximum size of the opening range. Here you can filter out very large ranges that may indicate a rangebound session could be ahead.

Range 1,2 & 3 start time – (STRING (text) INPUT) –   The time you want the EA to start monitoring the ranges. This will typically be the Frankfurt open or the New York open if you ware using the EA for trading the stock market indices as it’s designed for. You can set a different start time for each range but usually these would all be the same time.

Range 1, 2 & 3 end times – (STRING (text) INPUT) –  These are the 3 breakout times which is where the EA will place it’s pending orders ready for the market to breakout. So if you selected 10:00 as an open time (Frankfurt on my broker) and you wanted to take the breakout high or low of the 5. 10 and 15 minute bars you would enter 10:05, 10:10 and 10:15 respectively in the inputs. A good strategy is to use multiple entries so you are adding to breakouts that start to work and multiplying profits.

Stop trading time – (STRING (text) INPUT) – This is when the EA will cancel pending orders and stop taking trades that have not triggered. This is designed to make sure if a breakout has happened in one direction we are not leaving old orders lying around that may trigger late in the day. If it’s not broken out and working within the first couple of hours then it’s best to remove the orders.