HOMEWORK FOR THE TRADER
Service “Freelance” at the MQL5.com portal provides a unique opportunity: by selecting one of the 500 (!) programmers, the trader can use him to create his own trading robot. But for the robot to be successful, high quality Terms of Reference are required.
So how do you make up such Terms of Reference?
There is no need to prove that trading in financial markets, thanks to the development of computer technology and the Internet in recent years, has become a high-tech process. Of course, there is no unanimity as far as automated trading is concerned, but it is obvious that, according to statistics, over 60% of all trading transactions are now carried out using trading robots. And we are talking not only about the private traders, but also large, once very conservative, financial institutions, banks and funds. I don’t think I will be wrong if I assume that just in couple of years the called 60% will turn into 80, and then to 99%.
The sixth human feeling called intuition sometimes might help, but in conjunction with a strained nervous system it often interferes with a sober analysis and leads to disastrous results. As far as advisers (robots) for automated trading are concerned, they are able to work tirelessly 24 hours a day all 5 working days a week, devoid of any emotion, and make decisions in a split second according to their inherent algorithm.
And here arises a very important question: how to make the program under which the adviser matches exactly what its creator wanted it to be? We do not mean a higher power by the creator, but the trader who developed the trading system, and the programmer who shifted the system to the MQL5 language .
It is great when the trader is the same person as the programmer. In this case it is quite probable that they will find a common language.
But what if they are two different people? And one of them (the trader) knows absolutely nothing about programming? What is to be done in such a situation?
As practice shows, the only means of communication in this case is the Terms of Reference (TOR), in which the trader (the customer) should be clear and easy to understand as much as possible to describe what he wants to see cast in lines of a computer code.
As they say, as many people, so many opinions. But in our case it is not true. This author has analysed about fifty variants of the requirements that programmers impose to the structure and content of the TOR, and realized that at least four fifths of them are all the same. But the remaining 20% allow - though indirectly - to judge how competent the programmer is and what complicated advisers he can create.
If we talk about the averagely tricked advisers (we do not talk at all about neural network advisers), the requirements for the TOR would look like this:
- The trading platform, where the adviser will work;
- Currency pairs and time frames;
- Indicators used (if non-standard, apply);
- Full description of the system parameters (optimized and not);
- The rules of work with the trading system (entries, exits, support positions. Here it is better to make clarifying screen shots);
- Types of orders: market, deferred. Presence of StopLoss, TakeProfit, TrailingStop and NoLoss (if required);
- The rules for managing capital (fixed lot or the formula for calculating its size, percentage of deposit, etc.)
There are about 500 experienced programmers in the “Freelance” department at the portal mql5.com (MT4 and MT5 terminal menu tab “Help - MQL5 community - MQL5 Jobs”) with the help of which one can fairly quickly, cheaply and, most importantly, with high quality put this technical reference into life, receiving as a result an adviser ready to work.
Here are some useful tips on compiling the TOR:
- remember that the programmer is not responsible for the profitability of the strategy. Therefore, before you begin working with the adviser, test the profitability of trading on a demo or real cent account yourself;
- to avoid misunderstandings, check with the programmer all necessary terms and definitions;
- and know that the program debugging and error detection is always the responsibility of the customer. It is not excluded that after testing the adviser you will have to communicate with the programmer a number of times to make the robot as good as you want it to be.
And here, if you do not mind, the author will give you some additional tips based on his own experience.
I. Warn the programmer in advance that your adviser is a Christmas tree which you will decorate later with more and more toys. The toys will be additional indicators and filters that specify terms of entry into a position and exit from it, connecting to the time of different trading sessions, various options for calculating the lot size, the procedure for opening hedging positions … You never know what other ideas come to mind during the operation and improvement of the adviser!
If you do not provide for the possibility of such modifications in advance, you will have to pay for the new adviser each time (from my experience $50 - $100). If you do, you just pay for its modification, that is about $10 - $15. As they say, feel the difference.
II. This point comes out from p.I. You can never be 100% sure in the beginning which of the Christmas decorations will be of use and which will be useless and even harmful. Therefore, I strongly recommend that you provide a possibility to disable each (!) function in the settings of the adviser (on/off button). This will facilitate the process of optimising the operational parameters of the adviser in the MT4 and MT5 terminals tester.
A simple example: you originally envisaged closing position at TP, and then decided to add the possibility of closing at the crossing of MA as well. As a result, we have four options: closing only at TP, closing only at the MA, closing at the first onset of these events and closing at the onset of both events. The buttons on/off TP and on/off MA are required in order to figure out which one is the best.
III. Finally p.III which supplements the previous two. Do not hesitate to load the programmer and provide a possibility of optimization for every parameter of the adviser. I must say that this wonderful feature built in MT4 and MT5 sometimes gives the most amazing and very unexpected results. And the process of optimization is so fascinating that could replace any life-long hobby of yours.
As for trading in real accounts, I strongly advise against treating it as a hobby: money is a serious thing. Making up proper Terms of Reference is one of the components of the business process.