Algo trading guides and answers

Algorithmic trading means a computer places trades by following rules written in advance. Here is how that works, from the price feed to the order, and what automation can and cannot do for you.

Many people start algo trading by looking for a bot. A better start is a set of written rules. Here is the order we recommend, and what each step should prove before you move to the next one.

An EA is software. It works exactly as well as the rules inside it and the testing behind it. Here is why many bought EAs disappoint, what to check before you trust one, and when a custom EA makes more sense.

The right language depends less on the language and more on where your orders go. Here is when MQL5 is the better tool, when Python is, how to use both together, and where Pine Script fits.

There are two budgets: what it costs to build and run the bot, and how much capital the strategy needs to risk sensibly. Here is how to work out both, with illustrative numbers you can replace with your own.

Typical price ranges for custom EAs, Python bots and TradingView scripts, what actually drives the cost, and how to brief a developer so the quote is accurate.

Most backtests flatter the strategy because a few settings are left at their defaults. Here is how to set up the MT5 Strategy Tester so the result is one you can plan with.

There is no magic number, but you can work out a sensible one for your strategy. By the end you will know why 30 trades proves little, how the size of your edge sets the sample you need, and why testing many variants raises the bar.

An overfitted strategy describes the past perfectly and the future badly. By the end you will know the warning signs, the tests that expose curve fitting, and what each test can and cannot prove.

Walk-forward optimisation tests whether a strategy’s settings keep working on data they were not tuned on, again and again. By the end you will know the procedure, the two window styles, how to read the result, and how it relates to MT5’s forward option.

Both testers can run the same strategy and give very different answers. Here is what each one actually simulates, side by side, where the MT4 tester flatters an EA, and when it is worth converting an EA to MT5 just to test it properly.

A repainting indicator changes its past signals, so it looks far better on history than it ever was live. By the end you will know how to test any indicator for it, which ones usually do it, and how to fix it in Pine Script and MQL.

You converted a Pine Script strategy to MT5 and the backtest looks different. Usually nothing is broken. Here are the six reasons the platforms disagree, and how to check which ones apply to you.

When an EA’s live results drift away from its backtest, the cause is almost always one of nine things. Here is how to find yours by comparing the two trade by trade.

Usually yes, but with conditions. By the end of this guide you will know which EA behaviours firms commonly restrict, why the platform matters, and exactly what to ask the firm before you pay for an evaluation.

Many funded accounts are lost to a rule, not to the strategy. Here is how to enforce each rule inside the EA itself, with code, so one bad day cannot end the account.

Two accounts with the same 10% maximum loss can behave very differently. Here is how static and trailing drawdown move, with worked numbers, and what each means for position sizing and EA design.

The headline percentages look alike, but the details decide how much an EA can risk: where “today” starts, when it resets, and whether the floor moves. Here are the published limits of five popular programmes, each checked on the firm’s own pages on 12 October 2026, with a worked example.

Some prop-firm accounts restrict trading around high-impact news. Here is what those rules usually say, how an EA can enforce them, and why your backtest needs a saved event list to match live trading.

TradingView cannot place trades in MetaTrader by itself. By the end of this guide you will know the three parts every TradingView-to-MT5 setup needs, how to make it safe against duplicates and stale signals, and when a native MT5 EA is the better choice.

An EA only trades while its terminal is running and connected. Here is how to pick a VPS that keeps it that way: where it should be, how big it needs to be, which type suits your EA, and how to know when something stops.

Grid and martingale EAs often show long runs of small wins and a smooth balance curve. By the end you will know where the risk hides, how quickly exposure grows, why most prop firms restrict them, and how to build and test a safer version.

Yes, algo trading is legal in India, and since 1 April 2026 SEBI’s retail algo framework applies at every broker. Here is what the framework says, what it changes for people who build their own Python algos, and what to confirm with your broker.