Monday, July 10, 2017

How to do Strategy testing in MetaTrader 5?

The best way to test your trading strategy in MetaTrader 5 is with its built-in Strategy Tester that is made available in the trading platform. It will help mainly in testing how an Expert Advisor in the shape of a trading robot can help you perform your functions. This strategy tester is a very powerful tool that allows you to test the Expert Advisor’s efficiency and it will detect the input parameters before it begins working on the real trading functions in the forex market. The complete operation of this Strategy Tester is dependent on the historical data of a particular financial instrument. While testing, an Expert Advisor will go through all the accumulated quotes and will analyze them one at a time. The trading robot will perform virtual transactions keeping within the parameters of the trading algorithm. This helps in the price dynamics simulation. The Strategy Tester will allow testing of a trading robot on multiple currencies. Expert Advisors will have access to the financial instruments provided in the tester. This feature will allow testing even complicated Expert Advisors which can analyze multiple currencies. They will be able to identify the relationship between the currencies. The principal advantage by testing your strategy is the evaluation of the robot’s performance before real trading on a forex account. It takes only few minutes with this tester and you do not have to spend days or weeks testing out the robots in a real market. Testing Modes The Strategy Tester in MetaTrader 5 provides numerous testing modes, offering optimal speed and quality ratio depending on the needs of the traders. Simulated conditions will be realistic in a mode like this. ‘One-minute OHLC’ is launched for traders who would like to test their strategies accurately and quickly. They can select ‘open prices if they want a rough estimate, otherwise the strategy could be based on `bars’ open’ prices. The application of the Strategy Tester is not restricted to testing of trading robots alone; it can be used in solving math problems that involve optimization of parameters. In such cases, the trading history will not be used and there is no simulation of market environment as it makes way for math calculations which are implemented in the Expert Advisor. Optimization Another significant utility of this Strategy Tester is the optimization function of optimization. It enables selection of the best parameters for input for a particular Expert Advisor. As an example, you can change the parameters to get maximum stability and profitability while reducing the risk to the minimum level. During this process, an Expert Advisor can be tested many times with various parameter sets. Once you optimize, you can compare the results of all the tests and then you can select those parameters which offer the best trading robot performance. The Strategy Tester will support genetic algorithms. This feature will disable the search of combinations of input parameters and will help in the selection of only those which meet the criteria of optimization. Single Trading Strategy for Multiple Symbols Strategy Tester will allow you not to find best parameters for the trading robot for a given financial instrument. The statistical data which is obtained for tests on every symbol will be displayed in table format in the tab of ‘Optimization Results’. You can try a single test of any selected symbol from this table when you double click on it. This mode of optimization mode will allow you to test all the symbols on Market Watch on one single trading robot to establish the desired results and then analyze the change based on the symbols. Forward Testing The forward testing feature is built-in and it will help avoid problems. This particular feature will give an option to traders of dividing the history base of quotes into two separate parts. The optimization can be done for the first part and the second part can be used later to confirm the results that have been obtained. When the Expert Advisor works efficiently on both these segments, this is sufficient proof that the trading robot has got the best parameters working for the trader. The Strategy Tester is a tool that is indispensable when you want to do some strategy testing in MetaTrader 5. It saves considerable time in creating a tested and profitable Expert Advisor. Here is a three-dimensional visualization of the strategy tester for MetaTrader 5,

1 comment:

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