How does the Spread setting work in MT4? What are its values in pips?

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Hi there,

When backtesting in the Spread settings of MT4 you can custom select a spread - 

If I set this to '2' - does this mean 0.2pips?

Or if it's set to 10, does that mean 1 pip?

Thanks!

James

 
Jamesandhistrades: When backtesting in the Spread settings of MT4 you can custom select a spread - If I set this to '2' - does this mean 0.2pips? Or if it's set to 10, does that mean 1 pip? 
The spread is in "points" (not to be confused with "Points" as used in Stocks). A "pip" only has meaning for some symbols, like currency pairs. Nowadays a "pip" is usually 10 "points".
 

Thanks for this Fernando - so when backtesting currency pairs with an EA, setting this to '2' / 2 points would be representative of if your broker had a spread on, say EURUSD, of less than or equal to 0.2pips (how brokers describe it) / 2 points? E.G. IC Market's Raw Spread accounts advertise  "Our average EUR/USD spread is 0.1 pips" - would this spread setting suffice / be representative of an account like this? Thx, J

 
Jamesandhistrades #:Thanks for this Fernando - so when backtesting currency pairs with an EA, setting this to '2' / 2 points would be representative of if your broker had a spread on, say EURUSD, of less than or equal to 0.2pips (how brokers describe it) / 2 points? E.G. IC Market's Raw Spread accounts advertise  "Our average EUR/USD spread is 0.1 pips" - would this spread setting suffice / be representative of an account like this? Thx, J

As explained already 1 pip = 10 points, or 0.1 pips = 1 point.

When live, you will notice that the spread shown in the Market Watch is also shown in "points" and not in "pips".

The spread value used in the Strategy Tester, is dependant on what type of test you are doing. You could be testing for an average spread, or for a maximal spread, or for other combinations.

Please note that this spread value in the Strategy Tester is fixed spread and not floating spread.

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