By Justin Kuepper
Contact Justin

Now that we have a design document in hand, we can look at how these rules are put into code that a computer can understand. In this section, we'll break down a section of code and look at it piece by piece. For this example, we will use MetaTrader's programming language MetaQuotes II to build a very simple moving average trading system.

Defines: MATrendPeriod(100);

Var:MaCurrent(0),MaPrior(0);

If Bars < 100 Then Exit;

If FreeMargin < 1000 then Exit;

maCurrent =iMA(MATrendPeriod,MODE_SMA,0);

maPrior =iMA(MATrendPeriod,MODE_SMA,1);

If maCurrent > maPrior then

{SetOrder(OP_BUY,Lots,Ask,3,0,Ask+TakeProfit*Point,RED); Exit;};

If maCurrent < maPrior then

{SetOrder(OP_SELL,Lots,Bid,3,0,Bid-TakeProfit*Point,RED); Exit;};

The If/Then Format
After taking a brief look at this code, you should recognize a few elements that we touched on in the design phase. For example, you should recognize the If/Then format that we used when constructing our design. To get a better understanding of this code, let's break it down and analyze each part:

Defines: MATrendPeriod(100);

Var: MaCurrent(0),MaPrior(0);

Here, we're simply defining the moving average that we are using by saying that we want it to be an average of the last 100 bars. The Defines function here lets us do that for any type of data we want. After that, we simply invent two variables (items which we create to hold data) MaCurrent(0) and MaPrior(0). These two variables will hold the data that we will set in a later step.

If Bars < 100 Then Exit;

If FreeMargin < 1000 then Exit;

Here we see the If/Then format that we used in the design phase put to work. These two statements tell the computer to exit if certain conditions aren't met. Let's translate these two commands into English:

If Bars < 100 Then Exit; Ã  "If there are fewer than 100 bars (data points) on the chart, then exit the program without doing anything.''

If FreeMargin < 1000 then Exit; Ã  "If my account has less than \$1,000 in available funds, then exit the program without doing anything.''

You can translate any criteria you want into this format and put it at the beginning of your program in order to adapt to certain situations.

Buy and Sell Signals

maCurrent =iMA(MATrendPeriod,MODE_SMA,0);

maPrior =iMA(MATrendPeriod,MODE_SMA,1);

Now let's make use of the two variables we described above. Let's take these statements apart to see what they are doing:

maCurrent = Ã  Here we are telling the computer to assign the following information to "maCurrent''.

iMA(MATrendPeriod,MODE_SMA,0); Ã  Here we are using a simple statement, which uses the following basic format: Study(TimePeriod,Mode,Start).

Note that you can replace iMA with MACD, RSI or any other studies your trading system may be using. You can also replace the parameters to suit your own system.

If maCurrent > maPrior then

{SetOrder(OP_BUY,Lots,Ask,3,0,Ask+TakeProfit*Point,RED); Exit;};

Now we are getting somewhere! Here is the part of the code that tells the computer when to buy. Notice that we are making use again of the If/Then format that we used in the design document. Let's translate this to English to see what's happening:

If maCurrent > maPrior then { Ã  "If the current Moving Average is greater than the prior Moving Average, thenâ€¦''

SetOrder( Ã  "Create an order entry to â€¦''

OP_BUY,Lots,Ask,3,0,Ask+TakeProfit*Point,RED Ã  "Buy my defined number of lots at the ask price plus my take profit point, and mark it as a red point on the chart.''

); Ã  "End the order.''

Exit; Ã  "Exit the trading strategy.''

}; Ã  "End the If/Then statement.''

Note that the Take Profit Point is something that is defined by users when they add the trading system to their charts. Also notice that we are buying at the ask price and selling at the bid price - this is a key feature, especially when creating a system for stocks.

If maCurrent < maPrior then

{SetOrder(OP_SELL,Lots,Bid,3,0,Bid-TakeProfit*Point,RED); Exit;};

Finally, we have our code that tells the computer when to take a short position. Note that this statement is almost identical to the "buy'' statement, aside from the OP_SELL instead of OP_BUY as well as the usage of the bid price as opposed to the ask price.

Conclusion
And there you have it - the bare bones of what a trading system code looks like. Please note that the above code is not a complete trading system, as it does not include any commands to close open positions. Such additional aspects can be implemented using a format similar to the code we've shown.

In the next section of this tutorial, we will go into greater depth regarding the specific ways in which your trading system can be converted to code.

Trading Systems Coding: The Coding Process
Related Articles
1. Trading

### Trading Systems Coding

Automate your trades by translating your strategy into a language your computer can implement in this hands-free approach to investing.
2. Small Business

### Code Climate: How it Works and Makes Money

Learn more about Code Climate and its suite of static program analysis tools used by software developers to produce and maintain high-quality software code.
3. Trading

### Catching A Falling Knife: Picking Intraday Turning Points

Trying to pick the absolute top and bottom points can lead to excessive losses. This strategy allows you to hedge your risk.
4. Small Business

### The Importance of Having a Business Exit Strategy

Don't wait to put an exit strategy in place whether you own a small business or a large company.
5. Trading

### Must-Know Simple & Effective Exit Trading Strategies

An effective exit strategy builds confidence, trade management skills and profitability.
Frequently Asked Questions
1. ### What's considered to be a good debt-to-income (DTI) ratio?

Your debt-to-income ratio helps lenders determine your credit worthiness. Find out how to calculate your score and how to ...
2. ### What is the difference between a loan and a line of credit?

Learn to differentiate between lines of credit and standard loans, and determine when you are likely to use each method of ...
3. ### What does a Chief Financial Officer (CFO) do?

A CFO is responsible for accurate reporting of a company's financial information, investing the company's money and identifying ...
4. ### How did George Soros break the Bank of England?

George Soros pocketed \$1 billion by betting against the British pound, cementing his reputation as the premier currency speculator ...
Trading Center