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README.md

Triangular Arbitrage EA for BTC-ETH-USD

Professional MT5 Expert Advisor for Cryptocurrency Triangular Arbitrage

Alt Text

📋 OVERVIEW

This Expert Advisor implements triangular arbitrage for the BTC/USD, ETH/USD, and BTC/ETH triangle on Deriv MT5 or any compatible MetaTrader 5 broker offering these cryptocurrency pairs.

What is Triangular Arbitrage?

Triangular arbitrage exploits price discrepancies between three related trading pairs. The EA continuously monitors:

  • BTC/USD (Bitcoin vs US Dollar)
  • ETH/USD (Ethereum vs US Dollar)
  • BTC/ETH (Bitcoin vs Ethereum)

When prices diverge from their theoretical relationship, the EA can execute a profitable cycle.

Two Paths:

FORWARD PATH: USD → BTC → ETH → USD

1. Buy BTC with USD
2. Convert BTC to ETH
3. Sell ETH for USD
Result: More USD than you started with

REVERSE PATH: USD → ETH → BTC → USD

1. Buy ETH with USD
2. Convert ETH to BTC
3. Sell BTC for USD
Result: More USD than you started with

🚀 INSTALLATION

Step 1: Copy EA to MetaTrader 5

  1. Open MetaTrader 5
  2. Click File → Open Data Folder
  3. Navigate to: MQL5/Experts/
  4. Copy TriangularArbitrage_BTC_ETH_USD.mq5 to this folder
  5. Restart MT5 or press F5 in MetaEditor to refresh

Step 2: Compile (if needed)

  1. Open MetaEditor (F4 in MT5)
  2. Open the EA file
  3. Click Compile (F7) or the compile button
  4. Check for 0 errors in the compilation log

Step 3: Add to Chart

  1. Open any chart (BTCUSD recommended)
  2. Navigate to Navigator → Expert Advisors
  3. Drag TriangularArbitrage_BTC_ETH_USD onto the chart
  4. Configure parameters (see below)
  5. Click OK

⚙️ CONFIGURATION PARAMETERS

Trading Pairs

Symbol 1: BTCUSD    - Bitcoin vs US Dollar
Symbol 2: ETHUSD    - Ethereum vs US Dollar
Symbol 3: BTCETH    - Bitcoin vs Ethereum (cross pair)

⚠️ CRITICAL: Verify these exact symbol names match your broker's naming convention!

  • Some brokers use: BTC/USD, BTCUSD, Bitcoin, etc.
  • Check in Market Watch for correct symbols

Profit & Risk Parameters

Parameter Default Description
Minimum Profit % 0.5% Minimum profit required after spreads to execute trade
Max Slippage % 2.0% Maximum acceptable slippage
Lot Size 0.01 Fixed lot size per trade
Use % of Balance false Enable to calculate lot size from balance
Risk % 1.0% Percentage of balance to risk (if enabled)

Recommendation:

  • Start with 0.5% minimum profit for testing
  • Increase to 1.0%+ for live trading to account for execution delays
  • Use 0.01 lots for initial testing

Execution Settings

Parameter Default Description
Magic Number 789456 Unique identifier for EA trades
Slippage Points 50 Maximum slippage in points
Check Interval Ms 500 How often to scan for opportunities (milliseconds)
Enable Live Trading true Turn ON for real trades, OFF for monitoring
Close Opposite Positions true Close conflicting positions before new cycle

Recommendation:

  • Set to 100-500ms for optimal scanning speed
  • Keep slippage at 50 points for crypto volatility
  • Use MONITORING MODE (Enable Trading = false) first!

Display & Monitoring

Parameter Default Description
Show Panel true Display information panel on chart
Panel X/Y 20/30 Panel position on chart
Panel Color Dark Slate Gray Background color
Text Color White Text color

Advanced Settings

Parameter Default Description
Log Details true Write detailed logs to Journal
Max Daily Trades 200 Daily trade limit (safety feature)
Min Liquidity 0.0 Minimum order book depth (0=disable)

🧪 TESTING IN STRATEGY TESTER

Step 1: Open Strategy Tester

  1. Press Ctrl+R or click View → Strategy Tester
  2. Select TriangularArbitrage_BTC_ETH_USD from Expert Advisor dropdown

Step 2: Configure Test Settings

Basic Settings:

Symbol:          BTCUSD (or your main pair)
Period:          M5 or M15 (for faster testing)
Date Range:      Last 1-3 months recommended
Initial Deposit: $1,000 - $10,000
Leverage:        1:20 (crypto leverage on Deriv)

Model:

  • "Every tick based on real ticks" (most accurate) - RECOMMENDED
  • "1 minute OHLC" (faster, less accurate)
  • "Open prices only" (fastest, least accurate)

Step 3: Set EA Parameters

For Testing:

Enable Live Trading:    true
Minimum Profit %:       0.5% (lower for more trades)
Lot Size:              0.01
Check Interval Ms:     500
Show Panel:            false (disable for faster testing)

Step 4: Run Test

  1. Click Start
  2. Monitor in Journal tab for opportunities found
  3. Review results in Results and Graph tabs

Expected Results:

Good Test Results:

  • ✅ Win rate: 70-90%
  • ✅ Profit factor: 1.5-3.0+
  • ✅ Average profit per trade: 0.5-2%
  • ✅ 10-50 trades per day

Warning Signs:

  • ❌ Win rate < 50%
  • ❌ Large drawdowns
  • ❌ Very few opportunities
  • ❌ Negative profit factor

📊 OPTIMIZATION GUIDE

Parameters to Optimize

Use Strategy Tester's Optimization mode to find best settings:

  1. Minimum Profit %

    • Range: 0.3 - 2.0
    • Step: 0.1
    • Goal: Find sweet spot between frequency and profitability

  2. Check Interval Ms

    • Range: 100 - 1000
    • Step: 100
    • Goal: Balance speed vs CPU usage

  3. Lot Size

    • Range: 0.01 - 0.10
    • Step: 0.01
    • Goal: Optimize position sizing

Optimization Settings:

Optimization Mode:    Complete algorithm (thorough)
                     or Genetic algorithm (faster)
Criterion:           Custom (built into EA)
Forward Period:      1/3 (validate results)

🎯 LIVE TRADING CHECKLIST

Before Going Live:

  • Test on DEMO account for at least 1 week, Create a DEMO account
  • Verify symbol names match your broker exactly
  • Check spreads during your trading hours (should be reasonable)
  • Confirm all 3 pairs are available and liquid
  • Set realistic profit threshold (1.0%+ recommended)
  • Start with minimum lot size (0.01)
  • Enable panel to monitor performance
  • Have VPS ready for 24/7 operation (optional but recommended)
  • Set appropriate daily trade limit

Recommended Live Settings:

Minimum Profit %:        1.0 - 1.5%  (higher for safety)
Lot Size:               0.01 - 0.05  (start small!)
Enable Live Trading:    true
Max Daily Trades:       50 - 100
Check Interval:         500 - 1000ms
Show Panel:             true

⚠️ CRITICAL WARNINGS & LIMITATIONS

1. Speed is Everything

  • Arbitrage opportunities last seconds
  • Without VPS or ultra-fast connection, you may miss trades
  • Consider upgrading to VPS hosting for optimal performance

2. Spread Costs

  • Crypto spreads can be $10-$100 on BTC/USD
  • EA accounts for spreads in profit calculation
  • Higher spreads = fewer opportunities

3. Slippage Risk

  • High volatility = more slippage
  • Set appropriate slippage tolerance
  • Monitor actual fills vs expected prices

4. Order Execution

  • Not all brokers allow hedging (required for this strategy)
  • Execution must be instantaneous across all 3 legs
  • Partial fills can break the arbitrage cycle

5. Market Conditions

  • Works best during high volatility periods
  • Low volatility = fewer opportunities
  • Major news events can cause extreme spreads

6. Capital Requirements

  • Minimum: $500-$1,000 with leverage
  • Recommended: $2,000-$5,000+
  • Remember: You're trading 3 positions simultaneously

7. Risk Management

  • This EA does NOT use stop losses (by design)
  • Relies on instant execution of all 3 legs
  • Failed execution on any leg = potential loss
  • Always monitor performance closely

📈 MONITORING & PERFORMANCE

Information Panel Shows:

  1. Status: Active (trading) or Monitoring (watching only)
  2. Triangle: The three pairs being monitored
  3. Opportunity: Whether profitable setup exists
  4. Profit: Expected profit % and dollar amount
  5. Trades: Daily and total trade count
  6. Prices: Current BTC and ETH prices

Key Metrics to Watch:

  • Opportunity frequency: Should find 5-20+ per day
  • Execution success rate: Should be >90%
  • Average profit per trade: Should exceed 0.5%
  • Daily trade count: Should increase during volatile periods
  • Slippage: Should stay within tolerance

🔧 TROUBLESHOOTING

"Symbol not found" error

➜ Check exact symbol names in Market Watch ➜ Right-click Market Watch → Show All ➜ Adjust EA parameters to match

No opportunities found

➜ Spreads may be too wide ➜ Lower minimum profit threshold ➜ Check if all pairs are actively trading ➜ Try different time of day (more volatility)

Trades not executing

➜ Verify "Enable Live Trading" is ON ➜ Check if AutoTrading is enabled (button in toolbar) ➜ Verify account has sufficient margin ➜ Check broker allows hedging

Panel not showing

➜ Set "Show Panel" to true ➜ Adjust X/Y coordinates if off-screen ➜ Check if objects are visible (Chart → Objects → List)

High CPU usage

➜ Increase "Check Interval Ms" to 1000+ ➜ Disable panel in settings ➜ Disable detailed logging

💡 TIPS FOR SUCCESS

  1. Start Small: Use 0.01 lots until you're confident
  2. Monitor First: Run in monitoring mode for 24 hours
  3. Pick Good Times: Trade during high volatility (Asian/London open)
  4. Use VPS: 24/7 operation maximizes opportunities
  5. Check Spreads: Avoid trading during extremely wide spreads
  6. Set Alerts: Monitor via MT5 mobile app
  7. Review Daily: Check performance every 24 hours
  8. Be Patient: May take days to find optimal settings
  9. Adjust Thresholds: Increase min profit if too many losing trades
  10. Stay Updated: Crypto markets change - adjust EA accordingly

📞 SUPPORT & RESOURCES

Documentation:

Testing:

  • Always test thoroughly on DEMO first
  • Forward test for minimum 1 week
  • Backtest on recent data (last 3-6 months)

Risk Disclaimer:

Trading cryptocurrencies involves substantial risk. This EA is provided "as is" without warranty. Past performance does not guarantee future results. Never trade with money you cannot afford to lose.

📜 VERSION HISTORY

v1.00 - Initial Release

  • BTC-ETH-USD triangular arbitrage
  • Forward and reverse path detection
  • Real-time spread calculation
  • Information panel
  • Strategy tester support
  • Daily trade limits
  • Risk management features

🎓 ADDITIONAL NOTES

How the EA Decides:

  1. Scans prices every X milliseconds (configurable)
  2. Calculates both paths (forward and reverse)
  3. Subtracts spreads from theoretical profit
  4. Compares to minimum profit threshold
  5. Executes best path if profitable
  6. Logs results for analysis

Position Management:

  • Opens 3 positions simultaneously (one per pair)
  • Uses unique Magic Number to identify its trades
  • Can close conflicting positions automatically
  • Tracks total daily trades
  • Records performance statistics

Strategy Tester Integration:

  • Supports backtesting on historical data
  • Custom fitness function for optimization
  • Forward testing validation
  • Detailed performance metrics
  • Compatible with MT5 optimization algorithms

Good luck with your triangular arbitrage trading! 🚀💰

Remember: The key to success is thorough testing, proper configuration, and constant monitoring.

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Description
This Expert Advisor implements triangular arbitrage for the BTC/USD, ETH/USD, and BTC/ETH triangle on Deriv MT5 or any compatible MetaTrader 5 broker offering these cryptocurrency pairs.
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