In the first two articles of this sequel, I’ve revealed the importance of using a portfolio of robots and also explained how to choose the right robots for the mission. Now it’s time to go into the more technical details of running several robots on the same trading account.
After you have chosen your team of robots that will trade the account, and of course opened a trading account, the next move would be to apply the robots to the account and change the robot’s settings if necessary.
This email will explain how to do it, and it will be presented in a form of Questions and answers, featuring several good questions we received in the last few days since the two previous emails:
Q: How should I arrange the robots in MetaTrader so that they work together on the same account?
A: First of all, you should put each robot on its own chart. Using the robot’s user manual, find out what currency pairs each robot specializes. For each of the robots, open a chart for each of the currency pairs you wish to run it on.
For example:
Robot A should be used on USDJPY and EURJPY. Therefore open charts for these two pairs.
Robot B should be used on USDJPY and EURUSD. Therefore open another chart of USDJPY, and also a chart of EURUSD.
This last point is important to remember: if you have two robots that trade the EURUSD, open two charts of EURUSD and place each robot on its own chart. You can’t actually run two robots on the same chart. So be careful: if you attempt to drag and drop a robot to a chart window that already has a robot (see the top right corner of the chart!) the new robot will replace the other robot that you already applied to that chart window.
Q: Will the robots interfere with each other?
A: Usually you can run many robots on the same account without problems. One robot is not supposed to alter or change another robot’s trades. This is possible due to a feature of MetaTrader programming language, called “Magic Number”. This is a unique number attached to each trade that the robot opens.
From the moment the trade is opened, the robot will closely track this trade that carries a unique Magic Number, and won’t pay any attention to other trades that do not carry this Number. All of this happens automatically, without a need for your intervention.
However, there are rare cases of (usually) low-quality robots which do not carry a Magic Number. But if you bought a well-known product, such as the ones that are being tested in the 4xRobots.com website, Magic Number is a standard feature.
If you’ve coded the Expert Advisor yourself, or had a programmer perform the coding, be sure that a Magic Number is included in the “OrderSend” code (the programmer will understand). For the Magic Number to be valid, any numerical combination is ok, just make sure you include one. For further details on coding Magic Numbers, see the MetaTrader programming help.
Q: How will the new NFA rule against hedging affect robot portfolios?
A: New NFA (National Futures Association) rules for US brokers forbid brokers from allowing customers to open two trades on the same currency pair but with different direction. For example: opening one Buy EURUSD and one Sell EURUSD on the same account. That’s why, if you have an account with a regulated US Forex broker, you can’t run two robots that trade the same currency pair, and you can’t run a robot that opens positions in opposite directions (buy and sell) simultaneously. Solution: each robot you choose for the same account, should trade a different currency pair. Alternatively – seek brokers outside the US. They don’t have this limitation.
Q: How should I adjust the settings of the robots?
A: First of all, you need to check each robot’s user manual for the correct settings, and also run some backtests yourself to get an idea of how the robot performed on recent history, with the settings that the manual suggests.
The next task, after selecting the robots to run on the account and checking their general settings, is to balance their risk settings so that all robots work in harmony. For example, if you have several robots working on the same currency pair, there is a danger that you will have multiple positions on the same pair at the same direction.
Let me give you an example. What happens if two of your robots opened a Buy position in the EURUSD, each robot for its own analysis and reasons? Each position was sized say 1.0 lot, which means the leverage is increased: you have 2.0 lots open and if both positions profit, you will have a relatively large gain. However if the market suddenly drops, your loss is doubled!
Therefore, you should consider reducing the size of the positions for all robots working on the same pair. So if for example you had one robot on the USDJPY you would use a lot size of 1.0 than if you had 2 robots on USDJPY you can reduce the lots to 0.5 on each of the robots (it doesn’t have to be reduced in half, you can at least reduce the lots a bit).
Also in general, it is prudent to use low leverage at all times. This is especially true if you run several systems or robots on the same account, each of them having its own exposure to the market. Take my word for it, low leverage will keep you out of trouble!!
Look for each robot’s largest loss, and change the risk settings or the lot size of the robot, so that they will all match each other in terms of how much each robot can lose. This and other balancing issues are a bit out of the scope of this email, but don’t worry – additional materials on this subject will be coming out soon.
As a general rule, if you’re new to this, try to keep lot size for all robots to a minimum until you’re comfortable with the robots and have seen for yourself how they perform.