Will an automated trading Expert Advisor perform on a real account in a similar way as in the Strategy Tester? - page 2
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That sounds extremely skeptical, but you're probably right :-(
But MT5 Broker dont give any reqouts. Its a NDD. So i see no problem.
For example, EURSUD, bid at 1.34195, you send a request to open a sell. In the Strategy tester your trade will be open at 1.34195. If you are using the random delay, you will probably get a different price. On a real account, depending of the volatility of the market, you can get a trade with a huge difference in price, in case of news release especially.
This is really a very good topic....
I would like to add, that there are many different types of trading strategies... different types of execution types, different brokers and their abilities and disabilities. Maybe last but not the least the IT infrastructure.
No strategy or EA(automated trading strategy) can be 100% profitable unless it is seldom trades. There are two types trading commonly done by traders, Trend trading and Scalping.
Trend Trading :
1. Short term trend trading : any strategy that aims to close a trade within minutes to few hours or goes by 1 hour to less than 1 hour chart frame. Might trade multiple times in a day.
These types of EA's are difficult to analyze as during a day there are many short trends and they are quite different in nature than long term trends. These short trends generally happen due to sudden increase in buying or selling volume. You can only verify the worth of this strategy by testing in a real market.
Broker and account type plays an important role on how successful this strategy will work.
2. Long term trend trading : any strategy that aims at making not more than 2 trades a day and may hold positions for a day or two.
These types of EA's have medium difficulty in analyzing as they are not looking into sudden spikes in prices. They look for real movement in price, like few bars before deciding to close a position. These movements happen due to change in fundamental of the instrument.
A test of few years in Strategy Tester should give you a fair idea how it will work and 6 months to 1 years test in demo account will throw almost 50% to 90% market movement possibilities to the EA.
Broker and account type hardly plays any role on how successful this strategy will work.
Scalping :
This strategy looks for any movement in the market that can be profitable and will tend to close the position as soon as it comes to profit. The trades may remain open for few seconds to few minutes only. There is another type of high evolved scalping called High Frequency Scalping, where we are looking for 1 pip movements and the EA will try open a lot of position and also close positions in seconds or subseconds.
This strategy is most difficult to analyze because of various factors. This strategy requires trades to find the right broker, the right account type and very low latency connection with the broker trade server.
Broker, account type, internet connectivity and also what other facilities you have demanded from the broker(for example, if you have payback commissions from the broker and your net profit from trading is zero, you can still make money from the volume commissions you get) will decide how successful this strategy will work.
IT Infrastructure
Another factor that we tend to neglect is how good your IT infrasture is both at your end and the broker's end, how frequently does it get disconnected from the broker server. Can your broker handle the volume and type of order you are going to throw at it.
Is there any delay in quotes update in the terminal?
What is the latency?
What is slippage?
If your EA is processor intensive, do you have a very fast computer to let the EA decide on time what to do?
and the questions can go on depending on the strategy you are going to implement.
Trading Forex is a business: before entering a business, generally people ask a lot of question.... ask questions and find the right strategy, settings, etc etc and I am sure you can make money here.
hello
To refer to the initial question of Roi.Scout, I want to add that you can't be absolutely sure that an EA you buy, generates the same amount of money like in the backtest.
You have to pay attention to the setting of the backtest:
- How long was the EA tested? (a few years or only a few weeks)
- How big was the spred used for the test? Because you can write a EA which makes win in backtest based on a 0 pips spred, but most of the brokers have a bigger spread (this is important for short time trading)
- How much of the trades are closed with profit? (If the percentage is high (I mean over 80%) then you can assume that this EA will make profit)
- Does the EA use a StopLoss? (NEVER buy an EA or subscribe to a signal without Stoploss)
hope I could give you some hints.