What is algo trading in MT5?

Algo trading, short for algorithmic trading, is trading in which software decides when to place, size and manage orders by fixed rules, with little or no human input. In MetaTrader 5, Algo Trading is also the name of the terminal-wide switch (Ctrl+E) that lets Expert Advisors send orders: while it is off, they keep running but cannot trade.

Algo trading in general

EU financial law gives a precise definition, written for investment firms. Under MiFID II, algorithmic trading is trading “where a computer algorithm automatically determines individual parameters of orders such as whether to initiate the order, the timing, price or quantity of the order or how to manage the order after its submission, with limited or no human intervention” (ESMA, Article 4(1)(39)).

The same idea applies to a retail account. The algorithm can be simple: a moving-average rule with a fixed stop is an algorithm. “Algo” does not mean artificial intelligence, speed or a better result. It means the rules are written down and a program follows them the same way every time. More in what a forex trading bot is.

What algo trading means in MT5

Before an EA can send an order, two switches in the terminal must be on, and the broker must allow automated trading on the account:

The toolbar button and the Options setting are the same switch: the MQL5 reference says you can switch the terminal’s automated trading option “right on the terminal’s Standard panel”. The MT5 help still uses the older names, AutoTrading and Allow Auto Trading, and is exact about the effect: “If it is disabled, scripts and Expert Advisors can work, but are not able to trade”, and “no Expert Advisor will be allowed to trade, even if you enable automated trading individually in the Expert Advisor settings” (MT5 help).

An order sent while the terminal switch is off fails with error 10027, “Autotrading disabled by client terminal”; when the broker blocks it, the code is 10026, “Autotrading disabled by server” (MQL5 reference).

What switching it off does

A kill switch is the opposite tool: it closes positions instead of freezing them.

The common mistake

Changing the timeframe of the EA’s chart. With the option that disables algo trading when a chart’s symbol or period changes ticked in Tools → Options → Expert Advisors, the EA on that chart “is automatically prohibited from trading” (MT5 help). The button stays green and nothing trades. Every documented cause, with fixes, is in the MT5 Algo Trading button guide.

Algo trading with PipWarden

PipWarden is an EA, so it needs both terminal switches on and a broker that allows EAs. Before every order it checks the permissions itself, and when one is off it sends nothing and names it: Algo Trading is disabled in the terminal or algorithmic trading is disabled in the EA properties. The signal log marks the signal as blocked and shows that message. An EA not taking trades covers the other causes.

Lot size comes from your risk per trade and the stop distance, the same sum as the position size calculator. The PipWarden kill switch cancels pending entries and closes every position the bot opened. Closing is a trade request too, so it needs Algo Trading on. See how it works.