How to Automate Prop Firm Trading Strategies in MetaTrader 5

3/21/2025, 11:28:37 AM

Traders looking to scale their accounts without personal financial risk have a great opportunity in the shape of prop firms. However, passing the prop firm challenge is a bit hard and requires consistency, adherence and effective risk management.

That’s where automation jumps in. MetaTrader 5 (MT5) has an automation feature that can help eliminate impulsive trading, ensuring consistency and increasing your chances of passing the prop firm challenge. Automation allows you to follow a structured approach, reducing errors and keeping control of factors like max daily drawdown, lot size consistency, etc. In this guide, you will learn how to automate your strategies on MT5 to maximize your chances of success with the FundingPips challenge account.

Why Automate Prop Firm Trading?

Automation is a great MT5 feature that can help traders pass prop firm challenges. Here are some key benefits mentioned below:

Controlling emotions: Automation works on predefined principles that help you prevent random trading.
Consistency: Prop firms prefer traders with consistent performance over sporadic big wins.
Adherence to Trading Rules: Prop firms have rules like daily loss limit, consistency, risk per trade, etc. An Expert Advisor (EA) can help you comply with the regulations.
Saves time: The EAs can work twenty-four hours a day without monitoring. It saves you time.
Reduced human errors: Manual trading is prone to mistakes like incorrect lot size, selling instead of buying, etc.

Traders attempting to pass prop firm challenges usually struggle with psychological discipline. Automating the trading strategy can help you find flaws and strengths in your trade setups. Hence, you can refine your method and improve results. FundingPips allows traders to use EAs during the challenge and funded phases.

Setting Up Automated Trading in MetaTrader 5

Follow the steps to set up automated trading in MT5:

Converting Strategy to EA

You can convert your trading strategy to an Expert Advisor in simple steps. You have to write down the rules of your plan. These usually include the rules for finding entries, placing stop-loss, and taking profit. You can mention different conditions and scenarios for entry and exit. Once done, you can ask a developer on the MQL marketplace to develop your trading bot based on your trading method.

Alternatively, you can use ChatGPT to generate the EA yourself. You have to provide your trading rules and setups in a prompt. However, you must carefully evaluate whether the coded EA grasps the logic correctly or not.

Buying an EA

You can buy an Expert Advisor from the MQL marketplace or any other marketplace. However, before buying, you should know the EA’s functionality and risk parameters well. You can read the reviews of other buyers. Some sellers provide a link tothe live trading performance of the EA. In that case, you can a better understand the maximum risk, average monthly returns, consecutive losses, and many other functional parameters.

Now drag and drop the EA on your chart, enable “Allow live trading,” and change your inputs.

Backtesting EA on MT5

Before running the bot on your live account, you should backtest on at least last year's data. You can right-click on your EA and then click on Test.

Choose your currency pair, timeframe, and other settings, and click Start. After completing the backtest, you will receive a summary that includes win rate, consecutive losses and wins, profit factor, drawdown, and net profit. These metrics help you tweak settings to find further improved results.

Best Trading Strategies for Automation

Choosing the right approach is important while automating your strategies. Here are three effective ways:

Trend-Following Strategies

Use trend indicators or price action to detect a strong trend and then find entries in the direction of the trend.
Ensure SL and TP should align with the prop firm rules.
Set trailing SL to protect the profit.
Add more tools to form a confluence and increase accuracy.

Scalping EAs

Such EAs take multiple entries in a short time with small risk and reward.
Scalping EAs are comparatively more profitable due to several daily trades.
However, risk-reward ratio is important as more risk can ruin the potential profitability.

Risk-Adjusted Trading Setups

Use volatility filters to refrain from trading during chaotic conditions.
You can use news filter to avoid wild moves.
Test the EA with different pairs and settings to optimize your trading.

Risk Management for Automated Prop Firm Trading

Risk management is very crucial when you are dealing with prop firms. Follow these tips to safeguard your account:

Position Sizing and Stop-Loss Strategies

You can use fixed risk % per trade, like 1% of your account balance.
You can use dynamic stop-loss depending on market conditions.
Consider ATR indicator to adjust stop-loss based on volatility.

Avoiding Overleveraging

Prop firms have limited leverage. Adjust your EA accordingly.
Set a daily drawdown limit to avoid breaching prop firm rules.
Limit your daily trading to control risk.

How to Test and Optimize Your EA

Backtest your EA as mentioned earlier.
Forward test on a demo account before running it live.
Optimize parameters to enhance performance.

Common Mistakes and How to Avoid Them

Though automation brings ease to your trading, you are still prone to make mistakes. Here are some common ones:

Overfitting an EA to Historical Data

Never use the EA that works well in the backtest but not in the live trading.
Use multiple settings to stress test your EA.
Apply walk-forward analysis to find EA’s reaction in unseen conditions.

Not Considering Spread and Slippage

With wider spreads and thin liquidity, slippage risk may appear.
Backtest do not consider slippages or wider spreads.
Ask developer to add a slippage filter.
Test the EA under different conditions.

Ignoring Prop Firm Trading Rules

Avoid EAs that use no stop-loss.
Avoid martingale EAs.
Avoid HFT or arbitrage EAs.

The key is to learn well about the prop firm rules before you start. Tweak your strategy and EA to fit the prop firm trading.

Conclusion

Automating your strategy to fit the prop firm trading is a great opportunity. MT5 is a superb platform that enables you to automate your strategy, backtest and optimize. Before going live, test your EA in different environment on a demo account.

Join FundingPips and leverage your auto trading experience. Scale your account to $2 million.