How the EA algorithm works

In this chapter we will discuss how the algorithm works with the parts of your EA and how it will act.

How ticks/quotes are processed by your EA — Overview of how your EA processes market data

Your EA’s modular system

Your EA consists out of modules the algorithm interacts with. It’s because of the modulairity that you are able to create any EA. The modules are divided into three categories:

Modules which prevent opening
Modules for opening
Modules for closing

Read more about Modules. As you’ve seen in the image above, the algorithm will interact with one or more modules. In the next chapter we will go into detail about this.

Your EA’s behaviour

Your EA’s algorithm will behave differently depending on its state:

There are no open orders
There are one or more open orders

No open orders

When no orders are opened, all the EA does is wait for an Open Signal. When the signal activates, it will open an order, unless a Prevent Open module blocks it.

Tick/quote processing when no orders are open — Processing flow when no orders are open

One or more open orders

When orders are open, your EA will evaluate if the open orders should be closed, based on if a SL/TP was hit or a Close Signal has activated. When SL/TP is hit, or a Close Signal actives, it will first check if a new order would be (hypothetically) opened after closing the current order. This is done by evaluating Open signals (taking into account Modules which prevent opening) and Close Signals. So, the same process, as when there are no open orders, is evaluated. If an order would (hypothetically) not be opened, the order will be closed. Also, the EA will evaluate if additional orders have to be opened. Additional orders will only be opened when an Open signal activates, thus after being inactive for at least 1 processed quote.

Tick/quote processing when orders are open — Processing flow when orders are open

An order is closed when its SL or TP is hit, or by a Close Signal. All Modules for closing can influence the order’s SL/TP. SL is set below the order (from a Buy perspective) and can only be moved up by the same, or another, module. The opposite is true for the TP: it can only potentially be moved down. SL/ TP values are currently not sent to the broker.
An order is only closed if the order wouldn’t be opened again directly after closing, because if the algorithm would close the order, another order would be opened immediately and you would lose another round-trip of commission/ spread. To validate if this is the case, the Open Signal is re-evaluated before closing, also taking into account Prevent Open modules. F.e., when an order has to be closed seconds after opening, it’s very likely the Open Signal is still active. This can be countered by using a Prevent Open module, like the Time gap between orders module. When doing so, the Open Signal will be blocked, after closing the order, so the order can be closed.
When using the Multiple order Open module additional orders are opened when the Open Signal has switched from active (which opened the previous order) to inactive and activates again, now opening an additional order.

Setup: You configured your EA for allowing multiple open orders. You’ve got one Take Profit module and one Stop Loss module, both set at 10 pips. You’ve got one Prevent Open module: Time gap between orders. The module is set so that it allows an additional order to be opened 60 minutes after a previous order was opened.
Situation: There is one open order which was opened 30 minutes ago. The Open Signal is currently active.
A new quote is processed: The algorithm will read that the currently opened order should not be closed yet.
The Open Signal is active, but it has been active since opening the previous order. Since this is still the same active signal, an additional order will not be opened. The Open Signal deactivates and reactivates, the algorithm will now check if a Prevent Open module prevents opening an additional order. This is the case, because the previous order was opened 30 minutes ago, so an additional order will not be opened yet. When the 60 minutes has passed, the additional order is still not opened, because the current Open signal is considered to be an old Signal. Only when the Signal deactivates and reactivates an addition order will be opened.