Why can't the Strategy Tester
provide proof the SPOT EA works or not?
This tutorial assumes that
you have little knowledge of the Metatrader 4 Strategy
Tester and little knowledge of this EA,
SPOT, the ultimate trading robot, yet you may
have tried to backtest this Expert Advisor
on only one (1) currency pair on the MT4 Strategy
Tester and may have come up with less than satisfactory
results on some currency pairs in some time periods.
Myth
#1: This EA, SPOT,
the ultimate trading robot runs on a single (1) currency
pair. Truth #1: This EA, SPOT, the ultimate trading
robot must run on five (5) currency pairs at a time.
Rationale: One of the
unique features of SPOT, the ultimate trading robot,
is that it spreads out risk by diversifying open trades
on a variety of five (5) different currency pairs
at a time- namely, the EURUSD, USDJPY,
USDCAD, USDCHF & the EURJPY.
As you can see in the screenshots,
below, the MT4 Strategy Tester can only test one (1)
currency pair at a time, therefore it CANNOT give
ANY representation about the past performance of SPOT,
the ultimate trading robot.
(see red
checkmark in image below)
( ! MT4 Strategy Tester
cannot test five (5) currency pairs at a time ! )
Myth
#2: The MT4 Strategy
Tester is accurate because it uses real tick data
from the past. Truth #2: The MT4 Strategy Tester is inaccurate
because it does not use real tick data from the past.
Rationale: The Strategy
Tester works with simulated tick data, not real tick
data. That is why you always get low quality modelling
on backtesting. See 40.82% Modelling in screenshot,
below.
(see red
checkmark in image below)
Myth
#3: The MT4 Strategy
Tester emulates past performance of LIVE market. Truth #3: The MT4 Strategy Tester does not
emulate past performance of LIVE market.
Rationale: The Strategy
Tester has a fixed spread value to calculate bar interpolation.
This fixed spread can be found in the Symbol properties.
The Broker's demo/live spread is always changing as
market conditions influence. Broker's spreads, even
on the 4 major pairs, can change to up over 20 pips
during past LIVE market conditions.
Myth
#4: The MT4 Strategy
Tester's purpose is to see 'how well' an EA would
have performed. Truth #4: The MT4 Strategy Tester's purpose
is not to see 'how well' an EA would have performed.
Rationale: The present
benefit of the Strategy Tester is to determine if
EA will "function properly" in the MT4 Platform.
And, with the Visual Mode, to see if EA and Indicator/s
interact as intended. Other control variable values
can be optimized for general working ranges.
A Strategy Tester is useless
to see if a strategy is profitable. It is purely useful
to see that an EA actually functions - not how well.
With that said, here is a fun
Strategy Tester video that is just that... FUN, yet
worthless for proof.
