Review of the MT4 Strategy Tester. Introduction (types of testers, features of the MT4 tester)
In previous reviews, you got acquainted with the built-in testers for manual strategies Forex Simulator and Fx Blue. In comparison with the native MT4 tester, they have a key drawback: they are intended only for manual strategies and do not provide for optimization. Read about the advantages and disadvantages of the tester in this review.
In this multi-part article series, you will learn about the following:
This is the most detailed instruction on working with the strategy tester for MT4 posted on the FxCash blog.
Strategy Tester for MT4
You can get acquainted with the general principle of running trading systems over a historical period in this article… The goal of the cycle of these articles is to fully reveal the testing capabilities and give step-by-step instructions on working with the program. We hope that we will succeed and we will be glad to any comments and questions to each part of the cycle.
Testing a trading system is a prerequisite prior to launching it on a real account. It doesn’t matter if it is a manual strategy or a trading advisor. Testing is needed for the following purposes:
- You should understand how efficient the strategy is in principle, on what time intervals it is able to show the best results, on what assets, etc.
- You should see trade statistics: the ratio of deals with plus and minus, drawdown. If a deviation from the testing results is recorded on a real account, it is a reason to think about further actions.
- You should be able to see how trades are being opened. Develop your intuition.
According to the testing method, there are two types of simulator testers:
- Cyclic… Their algorithm provides for a sequential search of the prices of each candle. Getting the value of the price of a new candle, they compare it with the previous values in accordance with the formula, of which there may be several in the code. If the results for each of the calculations coincide simultaneously, the tester places or closes an order. In other words, the tester follows the set algorithm, sequentially going through the data for each candlestick. Spread and slippage are not taken into account, therefore the test results may be far from the real market.
- Event-oriented… This is an analogue of neural networks that are just beginning to appear in algorithmic trading. If cyclical simulators only follow the specified algorithm, finding matches of the specified conditions, then this type of testers is as close as possible to realistic events. The tester is loaded with the result that the trader wants to see at the exit. The tester goes through thousands of combinations, generating various situational events and analyzing external influencing factors. There are still few such testers and they are in the testing stage. In addition, knowledge of the code is required from the trader.
The strategy tester for MT4 belongs to the simpler first group. With every MT4 update (new build), changes are made to the simulator. For example, in previous versions, indicators by themselves were not tested. I had to take a robot template (written code with functions common to all EAs) and insert the indicator code into it. Now the MT4 strategy tester works in a multifunctional mode, although it still has enough shortcomings.
The essence of testing is as follows. In a separate window, the chart starts scrolling from the date specified by the trader in the tester. In the case of indicators, the trader monitors the movement of the chart and, by adjusting the scrolling speed, opens / closes trades manually. The trader does not see the price in advance, so he does not know what will happen next. But he can always go back and run the area again to check if the chart and signals are redrawn.
Nuances of the strategy tester for MT4:
- Order execution – Instant Execution without the possibility of changing. Considering the gross inaccuracies of the tester, this is not the biggest problem.
- History runs only on one asset, there is no simultaneous testing of several indicators / advisors.
- Spread, stop loss, trade volume – all this is indicated by the trader in the program settings. If something is missing (leverage, for example), they are taken from the parameters of the broker’s trading account. For example, a demo if the test takes place on a “demo”.
- Testing is performed only on standard time frames. Even if other intervals are added using the script, it will not help.
The first acquaintance with the strategy tester for MT4 is over. The next part is an overview of the settings. Ask any questions in the comments!