What is MT4's Visual Strategy Tester and how it help can you trade better.

       Testing on historical data is an essential prerequisite for a profitable automated trading system to be created.

Every trader knows that manual testing of the Expert Advisor or a specific entry and exit strategy is a quite labour-intensive and long process.

This is why many traders use special software tools for testing.

A visual strategy tester is now embedded in the MetaTrader 4 Client Terminal along with the MQL4 programming language.

Testing and optimization of experts or entry and exit strategies is not a challenge anymore.

MT4's first strategy tester appeared in the online trading platform MetaQuotes as far back as 2002.

Visualization allows monitoring of the expert testing process. One can see directly in the chart how the automated trading system trades. All this makes it possible to implement advanced standards in testing of Expert Advisors and to analyze the expert's behavior more precisely.

For testing to be precise, tick data is required. But it is often impossible to get tick-by-tick history for a sequence of years. Traders, as a rule, have only one-minute data available.

This is why there are three modes of bars modeling available in the strategy tester.

The choice of the bars modeling mode essentially influences the adequacy of the expert test and optimization results.

Thus, one can quickly test the expert using the fastest mode of modeling on historical data.

However, the testing error can be rather significant.

At every-tick modeling, in fact, the large amount of data to be processed takes much more time. But the results will be more precise and reliable.

All advantages of the visual strategy tester in MT4 enable the trader to optimize his or her automated trading strategy to meet market requirements.

Here is how MT4's visual strategy tester works and how it can help you: Try it!

Now that you have learned one of Kishore M's strategy ( found here) why don't you take his strategy for a spin?

We would like to hear from you on how well his strategy is helping you. It's important for us to have feedback for continuous improvement, so we could serve our students better.

To your trading success,

Claudia Tan (ACCA)
Class of June 2009

Singapore