Backtest forex mt4
A standard backtesting on MetaTrader 4 terminal using the data from the MT4 history center is usually good enough for Expert Advisors EA that are not scalping or pip hunting.
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The problem here is that the MetaTrader terminal does not have access to the real tick data. It only has access to minute bar data in the best case. This is usually not so important to an Expert Advisor that uses stop loss and take profit targets of more than pips, but in the case of scalping trading bots, your backtest will likely be completely misleading. It is very important to backtest trading strategies EA using data of quality that is as high as possible.
Every trader and programmer should learn how to backtest on MetaTrader 4.
In other words, a more accurate backtest shows what you can expect from the EA, because it is closer to the real trading environment. Basically, such trading simulation shows a more accurate picture of the past performance and especially if the EA is sensitive to different price quotes and trading costs like spread and slippage.
It is much easier to judge past performance looking at the most accurate test report. It's obviously you'll need to have MT4 platform installed on your computer in order to run any kind of backtest using MT4 Strategy Tester. MT4 alone can only use fixed spread which gives inaccurate results.
MetaTrader 4 trading platform is free of charge and available at mostly any Forex broker. The software is quite easy to install and easy to use.
It also allows simulation of slippage and running multiple MT4 instances at the same time from the same installation so you can run multiple backtests simultaneously. With Tick Data Suite 2 you have all backtesting tools in one place.
Tick Data Suite 2 integrates directly into each and every MT4 terminal on your computer. Install once and simply access TDS2 from MT4 Strategy Tester. Easily switch between time zones and DST settings without the need to re-download and re-convert the data.
Slippage can be applies on entry, exit, SL and TP. Download and install Tick Data Suite 2 software. TDS 2 is a paid software. There's a free trial available if you want to test it before you buy.
Any other computer applications for backtesting on MT4 does not have an option to use real historical spread. In the " Prerequisites " step you will be asked to install them and you should do that, otherwise, TDS2 will not work. Using the Tick Data Manager application, which comes with the Tick Data Suite 2, you need to download tick data from Dukascopy or other available source.
This is the historical price data you can use for backtesting. Tick Data Manager allows you to download history price tick data of any currency pair or instrument available at Dukascopy or TrueFX. As you can see there's an option to choose how much tick data you want to download by clicking buttons: Last Year, Last 6 Months, New Data, All Data or Year To Date.
Tick Data Manager has a "Task queue" window and this is where you will see all the download tasks appear when you start them. You can have many download tasks scheduled in the Task queue. In the image above you can see there are three currency pairs EURUSD, GBPUSD, USDCAD that have tick data downloaded. This is easy to see when you look at the " Downloaded days " column which shows how many days of history price data is actually downloaded for each instrument.
For example " Start date " shows from which date history price data is available for each instrument at selected source Dukascopy in this case.
How to Backtest on MT4 or MetaTrader 4 to understand your MT4 EA
I am writing this guide on 17th October and in this example I have all tick data for EURUSD from May 4th until October 16th yesterday. Download MetaTrader 4 for PC, install it and create a demo account. If you already have an MT4 client terminal installed you can jump to the next step.
Once you agree with the terms and conditions you can click NEXT to proceed to the next step and complete the installation. First, you need to select a demo server of your broker or simply add " MetaQuotes-Demo " server to the list by clicking the " add new broker Once the server appears on the list, select it and click NEXT.
Then, select " New demo account " and click NEXT again. If you have an account already just click CANCEL and log into your account. After login window appears enter your MT4 account number login and password to log into your MetaTrader 4 account.
Having real historical spread in your backtesting process makes your strategy test more precise. Backtesting of automated trading strategies Expert Advisors is done in the MT4 Strategy Tester window. Before you run backtest Forex trading strategies EA you should check if Tick Data Suite 2 is loaded with your MT4 platform. If TDS2 is loaded you will see a button " Tick data settings " and a checkbox " Use tick data " in the MT4 Strategy Tester.
You might need to resize your MT4 window to make it wide enough for those options to appear. MT4 Strategy Tester is set to use Tick Data and variable Spread during backtest. In this example I enable variable Spread and click OK. You can see " Variable " is set the Spread value in the MT4 Strategy Tester. Most of the Expert Advisors have at least few parameters you can set. In the " Inputs " tab you can set them the way you want for this particular test. You will find all variables settings listed in the Inputs tab.
If you want to reset to default settings click the RESET button. Ignore columns Start, Step, Stop. You do not need them now, because they are for EA optimization and not used during a backtest. Next step is to select currency pair Symbol and its time frame. It has no effect if you change the Spread here.
Tick Data Suite 2 will override this setting and use real variable Spread, because I have set it that way in the previous step. Strategy Tester allows you to select date range for the test. If it's not selected, like in this example, backtest will be performed on all available history price data. When you done setting parameters click " Start " to begin the test.
After backtest is finished you can see the results. But there's a better way to run backtests and you will learn it in this tutorial. EURUSD history center data, default settings, MetaTrader client terminal It's obviously you'll need to have MT4 platform installed on your computer in order to run any kind of backtest using MT4 Strategy Tester. Tick Data Suite is not free, but it's price is quite reasonable.
Why choose Tick Data Suite 2. All Tools in One Place With Tick Data Suite 2 you have all backtesting tools in one place. Very Easy to Use Tick Data Suite 2 integrates directly into each and every MT4 terminal on your computer. Switch Time Zones Easily switch between time zones and DST settings without the need to re-download and re-convert the data. Before you can run any backtest you'll need to prepare your backtesting environment which is to download, install and configure required software.
Download Tick Data Suite 2 from Birt's website. Downloaded installation file of Tick Data Suite 2. Tick Data Suite 2 auto-installer launched.
Install Tick Data Suite 2 prerequisites if asked. Enter your License Key for Tick Data Suite 2. Enter your License Key, click NEXT and finish the installation following on-screen instructions. Shortcut to Tick Data Manager on computer's desktop.
The Ultimate Guide to MT4 Backtesting
Downloading EURUSD history prices with the Tick Data Manager. In this example I am going to download all available EURUSD Tick Data, which is from year Once you are ready click the " Start download ". You can also pause, cancel, delete tasks if necessary. Tick Data for multiple instruments downloaded in the Tick Data Manager. Other columns show more information.
Downloaded MT4 installation file. Download MT4 from your broker's website or directly from here: Shortcut to launch MT4 client terminal. Choosing MT4 server for new account. Once MT4 loaded, you need to create a demo account. MT4 Strategy Tester can be accessed from the top VIEW menu. Tick Data Suite menu and settings integrated into MT4 platform.
Select Expert Advisor and set its properties. Set Expert Advisor inputs settings. Select symbol, time frame and modelling type in MT4 Strategy Tester.
Set the date range for backtest in the MT4 Strategy Tester.