To back test

To have a legit and more accurate backtest, you got to have enough history data in your platform in order to perform a good backtest. Press F2 on your keyboard, MT4 will automatically direct you to a history centre. Select a symbol you wish you backtest, in this case we use GBPUSD as our test. Double click on GBPUSD, system will drop down several timeframe. Double click on 1 minute(M1), then hit Download button. MT4 will download as much history data as possible from Meta Quotes Corporation.

Once download completed, you'll be able to see something similar to the above. This can apply to other currency pair. If you wish to backtest with other symbol, simply repeat the procedure on other symbol's 1 minutes (M1) data. Click close button to close data center. Hold your "Control" button and press "R"(Ctrl+R), this will call out the tester window at the bottom of MT4.


Here is a brief introduction for each function in the tester:
Expert name: You can change any expert advisor to test with
Symbol: Currency pair you wish to test with
Model: Normally we use every tick as the quality of backtest is more reliable. You can choose other type of modeling, but less accurate.
Period: Time frame to test with (1 minute, 5 minutes, 15 minutes, 30 minutes, Hourly...etc)
Expert properties: Allow you to change settings on the EA
Symbol properties: To show you the testing environment of the currency pair you wish to test with
Open chart: Once backtest finish, by clicking this button, you'll be able to see all the trades placed on the chart.
Modify expert: MT4 will call out Meta Editor and immediately open the source code of the EA for your convenient to modify codes.

Below are screenshots for Expert Properties:


The above shows Initial deposit as 10000. It means the backtest should start with initial balance of 10k. Position Long & Short meaning both buy and sell are allowed. You can choose either buy only or sell only.


Above screenshot shows the input tab in Expert Properties. You can change the parameter of the EA for this particular backtest. In this case, we change the stop loss to 200pips from original 50pips. You can Save your parameter by clicking "Save button" or load a preset you've previously saved. Once completed setting up parameter, click OK button to exit.


Back to tester main window. Select the date of testing. From ~ To must be complete. Now, you can enable Visual mode. By enabling visual mode, you'll be able to view the trades on the chart whilst the tester is doing all the calculation at the background. Visual mode is obviously slower compare to non visual mode. Or you can choose to run a quick backtest without visual, and click on the Open Chart button later to view the trades offline. Click on Start button to begin backtest.

After the test, you can go to Report tab at the bottom of the tester window. You'll be able to see the full detail of the backtest. You can right click on the report and choose Save Report to get a full HTML report with equity graph in it. If you notice, there are 2 important column in report. Mismatched charts errors is the number of bars you downloaded from history center does not match with the visual on the chart. Many reason causes this, such as difference of brokerege firm's rollover time, data corruption, data overlapping and so on. With a bad history data, automatically your Modelling Quality will drop. Normally 90% is good enough and very acceptable. However, there are professionals that uses TICK DATA to produce 99% accuracy backtest result. There is a whole bunch of knowledge in collecting good quality tick data and how to import them into Meta Trader 4 to do backtest with Expert Advisors. I have not plan to extend our focus that far, let's just stick with this for the time being. Meanwhile, if you're interested in 99% backtest, you can search online.

The above equity graph are generated automatically from the backtester after I ran a 3 month backtest on GBPUSD.

Magic number

OK. Let's talk about trade handling. This EA was made to trade alone, and not suitable when there is human interference or other EA trading on the same account. When you try to place a trade on the account with MACD Sample trading at the same time, the EA will take over your position and modify your stop loss according to the TrailingStop you've declared in the EA earlier. Which is why a Magic Number is important. We need a special tag for a robot to recognize which are the trades that they should handle, instead of modify all stop losses for all the trades on the same platform. So, here we go...


Place a new external variable for user to key in Magic Number for the EA to recognize it. Magic Number is a special tag that doesn't show on your trading statement because its hidden. Since we're doing Magic Number, I've take another step to pull out the trade comment. By putting the trade comment as a variable, this can help us trace our trading history. In example, while we're modifying the EA from version 001 until current version 004, we have trouble to figure out from where our EA evolved. By looking at the trading statement, scroll all the way down, all the trade comment saids the trades are triggered by "macd sample". Therefore, in the future we can change the trade comment directly from the variable everytime we modify the EA.

Magic number had taken over the original fixed magic number 16384. Meanwhile, trade comment will automatically refer to the variable we've declared earlier.

Added new filter here. Whilst the EA trying to filter out all the trades from the same pair(OrderSymbol()), we've added new Magic Number as new filter for the EA to recognize which are the trades needs to handle instead of handle all the trades from the same pair.

Been busy lately

Hello there. I've been busy lately. Have not been able to update the blog. I'm sorting things out and will continue to blog as soon as possible. Here is what happened to me while I'm not around: