forextester, Author at Smart Forex Tester

Smart Forex Tester Suite Ultimate

Smart Forex Tester Suite software is all you need to automate your trading strategy and test it – both on historical market data and on live prices.

Now, in the latest edition of the Suite we also added the functionality to detect the market turns in real-time.

To understand why we need it, let’s start from a simple question.

How can we make profit in Forex?

The market is random. We can’t predict its direction. However, what we know is that the markets never move in a straight line.

Moreover, we know that the prices travel from an extreme in one direction to the next – in the opposite. This is how the markets work (price discovery).

Imagine that you could know when the market is going to reverse – that would be great, right? But is it possible?

Watch this 3 min video and see how our software does it in real time. (Note the video is very informative, so pause it if needed to read all the subtitles).

The detection algorithm in our software is the result of our many years’ research experience in signals detection from the random background noise.

Principally different from indicators

The advantage of our algorithm is in that it works so fast that you can use it for timing of market entry or exit.

Whereas indicators are principally lagging, because they use averaging. Even for a very short M1 time frame, you need to wait for each reading for 1 min. Which is long enough time for a lot of see-sawing to happen.

Indicators are useful to provide a big picture, but it is difficult to base your trading on indicators only. For example, the RSI can indicate that the market is overbought or oversold – but this condition can stay for quite a long time and even develop further.

Day Trading and much more

Thanks to low detector delay, you can use its signals – the dots you saw in the video – for the day trading.

On the longer time frames, the detector signals can be part of more complex trading strategies, including indicators-based. Combined signals will let you enter the market much better.

Adding proper market timing to any lagging indicator will give you the best of both worlds. Otherwise, you could lose tens of pips on both entry and exit – because of the seesawing of the market.

Moreover, if a signal turned out not to be a pivot point, good timing helps to minimize the losses.

Because even at local extremes, the market tends to slow down and seesaw – and you might have the time to exit if you are unsure – you may even make a little profit!

Trading Automation

Forex can be stressful and take a lot of time. Trading automation is a way to reduce the stress and boost the effectiveness.

Smart Forex Tester Suite Ultimate makes the pivot points signals available for your automated C++ trading strategy. It gives you an enormous potential.

Similar to the auto-pilot in an aircraft, the automation is the best way to get rid of routine and time-consuming activity. An automated strategy monitors the situation way more reliably than you and reacts much faster.

So, you can delegate the market entry task to the algorithm. You will save your time – no need to be chained to your computer. You can leave your desk and return only when you hear the sound signal of the market entry from the computer.

Next, you can decide for yourself what to do with the position opened. And like we said above, even if it was a false alert, you might still have enough time to minimize the impact.

Alternatively, you can enter the market manually, but then automate the tracking of your position. Obviously, pivot points signals let you implement much more flexible profit taking logic – compared to regular (even trailing) stops.

Ultimate Forex Strategy Testing Environment

Smart Forex Tester Suite Ultimate provides all needed to develop and test your trading strategy.

The Suite’s unique functionality makes it possible to considerably reduce the time required for testing – be it manual or automated.

Forex Trading Simulator is designed for manual testing of your strategies. You can test both on historical tick-by-tick market data and live prices. The Simulator provides 100% market modelling quality with the tick rendering accuracy of up to 1 ms.

If your day job keeps you very busy on weekdays, offline Simulator is a perfect solution. It lets you test at any time, convenient for you. Most importantly, on weekends – when the market is closed.

The flexibility of offline testing alone makes the Simulator superior to any demo account. But the Simulator also saves your time, due to variable tick data feed speed functionality.

So, doing Fast forward on the slow market, you can skip the dull time – without losing anything! It is like skipping the commercials in a recorded TV series.

Alternatively, using Slow motion feature, you can test on fast markets. For example, during news releases, it might be useful to reduce the data feed speed to up to 1/4X.

In addition, it is the fast moving market when it is interesting to use the trading server delay functionality. The delay is always present in real life online trading and the Simulator lets you model it.

You can also run the Simulator online. Live market data feed gives you real tradable prices for 10 main currency pairs – no account needed. You can use pivot points algorithm to generate real-time market signals and test on live market.

Furthermore, you can also manage and save your time in online real-time simulation! Thanks to a unique Time Shift feature.

Time Shift lets you pause live data feed whenever needed, so you don’t have to be chained to your computer even during live trading. When you resume, all the offline data speed manipulation options will become available, as well.

This functionality is evidently impossible to get on a regular demo account.

Smart Forex Tester is used for trading automation design and testing, both offline on historical data and on live prices online.

The Tester only works on tick data (no interpolations!) and so it provides 100% accurate market modelling.

The Tester uses the same data engine as the Simulator, so all the options to vary data feed speed and simulate server delay are also available.

The Tester provides full-fledged C++ environment for strategy definition. Pivot Points detection algorithm is made available to strategies.

The C++ environment makes the Tester EA-compatible on source code level. As MQL is very like C++, after relatively small syntax changes an MQL code can be compiled and run in the Tester. The trading interfaces between the strategy and the Tester engine are similar to those used in MT.

You can analyze your trades using zoom in function. It shows a snapshot of the market with a tick accuracy – even when the test continues running at the maximum speed.

The Tester will provide more smart functionality* to further increase test efficiency and save your time. E.g. in the Quick test mode you can get a draft test result much faster. With the Test Manager, you can save the most critical market data as test scenarios and only run tests in batches instead of testing every time on full data arrays.

So, in summary, the Smart Forex Tester Suite Ultimate will give you all you need:

OFFLINE Trading Simulator

100% modeling quality
up to 1 ms accuracy
varying data speed
pivot points signals

ONLINE Trading Simulator

10 main currency pairs
no account needed
live tick data recording
Time Shift for time saving
live pivot points signals

Strategy Tester

Test Automation framework
C++ development environment
source code EA-compatibility
pivot points signals in C++ code
Trade Analyzer
quick test mode*
Test Manager*

Data Manager*

Benefits from Synergy

Smart Forex Tester Suite Ultimate consists of very advanced and sophisticated software components that you can use stand-alone. However, it is from synergy between them that you will benefit the most. It will boost your efficiency and save your time.

*) Available 2H2018

Market Entry Timing With The Pivot Points Analyzer

Market entry timing is critical for success in Forex. How can we decide when we need to open a position? Or to close it.

Have you tried using indicators for that? If yes, was your experience successful?

We did try and the results were not good at all.

The problem is that indicators are averaging, and so they lag by definition. Indicators can give you a “helicopter view”, but they alone are not good market timing tool.

Just one example – RSI. When it drops below 30 (or exceeds 70), it is widely used as oversold / overbought sign. But you probably have seen how RSI can not only stay in this state for substantial time, but reach even more extreme values.

We use the nature of the market – price discovery mechanism – to make the decisions. The markets always move from an extreme in one direction to the next – in the opposite.

Pivot Points Analyzer is a product we created for that. Watch this 20 s video:

The colored dots are the pivot points generated by our software in real time. The market tops are marked red, the bottoms – blue.

Would you like to have access to such signals in your trading?

For market entry timing in the day trading, you can use the Pivot Points Analyzer as is. On the longer time frames, it would be best to combine its signals with indicators. This combination will give you the best of both worlds.

Obviously, some signals are false alerts. I.e. the market doesn’t turn the direction.

But even if this is the case, we can notice that the market usually slows down and seesaws around these points. So you may have the time to exit the market to minimize the losses if you are unsure.

Pivot Points Analyzer was recently added to the Smart Forex Tester Suite. Which now gives you all needed to effectively develop and test trading strategies.

DOWNLOAD THE PIVOT POINTS ANALYZER

Pivot Points Analyzer (BETA) is added to the Smart Forex Tester Suite!

Pivot Points Analyzer (or PPA) is a new software to detect market extremes in real-time.

The value of the Pivot Points Analyzer is in that it can generate real-time market entry and exit signals like those shown on the screenshot below.

pivot points analyzer real-time — Pivot Points Analyzer detects tops (red) and bottoms (blue) in real-time

The picture shows the signals generated for about half an hour. Red dots indicate market tops, and blue dots – bottoms. Note that it is just an example – you can tune the detector to look for more or less extremes.

Would you be able to profit from these signals?

We believe so. Even though the detection is obviously not ideal, quite many signals are spot on.

If you would buy at the time a blue dot appears or sell when a red dot signaled, you could definitely close the majority of these positions with profit.

The PPA algorithm is principally different to that of indicators that are widely used in attempting to predict the market direction.

Indicators are lagging so they can’t be successfully used for timing the markets.

Whereas the Pivot Points Analyzer, while following the big picture, works in real time with only a minimum lag.

A bit more details on what “real-time” means. The picture shows many dots simultaneously, but every dot was generated exactly at the moment it is plotted. In other words, each dot is detected based on the market data available only before this time.

PPA signals can be used on its own, especially if you do day trading. But you can also use it as a building block for more sophisticated trading strategies. Here you can benefit from combining the PPA with indicators.

Important to notice, that PPA can help to minimize the losses, even if the signal was a false alert. In other words, this means the PPA signaled the extreme that is not big enough to be a pivot point.

Usually, even at small extremes, the market slows down and seesaws. So you will probably have enough time to exit if you are unsure. And you may even make a little profit from a good timed entry.

The Pivot Points Analyzer is a very powerful tool to build your trading strategy.

The PPA is now a part of the Smart Forex Tester Suite. Which means that the Analyzer is complemented will all needed to efficiently develop and test all PPA-based strategies.

Subscribe to download the Suite now.

Smart Forex Tester Suite – Free Licenses

Want Suite 2.0 absolutely FREE? Check our Bonus Program!

There is an updated version of this page: free licenses guide.

Smart Forex Tester Suite includes 3 free stand-alone products: Offline Trading Simulator, Online Trading Simulator and Strategy Tester. The Strategy Tester also includes free offline Pivot Points Analyzer.

Our subscribers are granted a free license for each of these 3 products.

Once you activate any free license, you can switch between all the above products as many times as you need. Moreover, your free licenses never expire.

You can get your free license directly from the software. This 30 s video shows how. (NOTE: remember to use your own email address you subscribed with!)

(if you haven’t done this yet, subscribe and download the software).

On start-up, you’ll be shown the main products menu, which looks like this:

Click the Get free license link opposite the free product you want.

If you are unsure which product you need – no problem: just pick any and try! Like we said, you can always switch products later!

You’ll be taken to the next screen where you’ll need to enter your email address you used to subscribe with us and then click the Validate license button (click on the image to enlarge):

Smart Forex Tester Suite -license activation — Smart Forex Tester Suite – license activation

The software will then activate your license. You may want to save your personal code (seen in the Code field) for later – in case you need to use the software offline.

Next, you need to restart the software to finalize license activation. That’s it – you are good to go!

Now, when you start the software, the link for the product you activated the license for, will change to Use and all the functional tabs will be visible.

When you want to switch between free products, you will need to repeat the procedure above. This time, you won’t even need to enter your email.

In addition to free products, Smart Forex Tester Suite offers 2 premium bundles. While free products offer ample functionality which is enough for developing and testing your manual or automated trading strategy, it is the bundles that bring you to completely new level.

Premium bundles not only provide convenience by eliminating the need to switch licenses. Most importantly, they add value because you can use all the bundled products simultaneously – and in any combination.

For example, you can run in the Tester an automated trading strategy that uses the signals from the Analyzer.

Or, you can test semi-automated strategies, where you enter the market manually, but let the automated trader monitor the profits and risks for you (“autopilot” mode). Or the other way around.

As you see, the Smart Forex Tester Suite can be used in lots of different ways.

Offline Forex Simulator: Test Your Trading Strategy Even When Markets Are Closed

Offline Forex Simulator is a software tool that fully imitates the markets on our demand – whenever we want it, and even without a connection to Internet.

Offline Simulator is very handy for most of us who have our day job. Watching Forex markets requires time, which is not easy to find during busy weekdays. The Simulator helps to do that during weekends.

How does the Simulator work? It “plays back” saved market data. Similar to watching a video tape – if by video tape we mean a file of price quotes.

A good Offline Forex Simulator provides 100% accurate market modelling quality. For that it must support tick-by-tick data. A “tick” is a new price quote received by the market. For any currency pair, a tick is a combination of 3 numbers: bid price, ask price and time stamp.

The time stamp has an accuracy of up to 1 ms. Such high precision is not excessive.

There can be over ten ticks each second during fast market moves. Which often happen during some events or major news releases. However, ticks can also come as rarely as 1 in a minute, typically in slow Asian sessions.

In this article we will show you step-by-step how you can test your trading strategy with the help of our Offline Forex Simulator.

First of all, you need to download and install the software. It is free for our subscribers. If you haven’t yet subscribed, do it here.

Once you activated your free Forex Simulator license, navigate to the Data tab. This is where you select and load the tick files. The Simulator provides an inbuilt data file for you to try out of the box. The file contains 2 days worth of ticks, which is more than enough to get you started.

We will use the inbuilt file in our example.

Once you have loaded the file, the offline Simulator shows the loaded data interval on a monthly calendar. This doesn’t mean that only 1 month long files are supported. The calendar just shows the 1st month of the data for you to select the start date and time for testing.

Offline Forex Simulator – Loaded Sample Data File

You have the options to specify the exact time, or select one of the standard times, corresponding to the start of 3 major trading sessions (USA, Europe and Asia).

Let’s select the time known for the most intensive trading – when the US and European trading sessions start to overlap (at noon GMT) and begin a new simulation with pressing the Start button.

Smart Forex Tester, Simulator and other products to be integrated

Smart Forex Tester and Simulator are the first products that we have integrated on our new platform. Next products to be integrated are Pivot Points Analyzer and Data Recorder.

Previously, each one was a stand-alone product.

The main rationale behind integration is that all the products share many functional blocks, e.g. data engine or price graph. So integration will speed up our development process and will also help us improve quality.

To make each product available as a stand-alone software, we introduce licensing. Basic individual products will continue to be free for our subscribers, and you can have a free license for each one.

However product bundles will be premium paid products.

Smart Forex Tester, Simulator are integrated

What it means for you? If you are our subscriber, you will simply need to claim your personal free license for each product that you are interested in. We will email you your personal code and instructions.

Like we said, basic licenses are free – but you will need to reinstall the licenses every time you want to switch between products. Paid bundles will provide convenience by eliminating the need to switch licenses. They will also add value because you can use bundle components simultaneously in any combination.

So be sure to check your inbox for the email with your personal credentials and download instructions.

Stay tuned!

Forex testing on historical prices – is one week data enough?

We receive questions from time to time on why our Forex testing tools only support one month of data. These questions obviously arise because Smart Forex Tester and Simulator GUI has a tab with one month calendar.

As a matter of fact, both Tester and Simulator can work with unlimited data.

A monthly calendar view was added to provide an easy way to select when to start the test (stopping the test can be obviously done any time).

But on this occasion, it would be good to discuss here whether we really need big data files in Forex testing.

The only argument in favor that we can imagine is the need to test strategies that use long time frames.

But if we really wanted to use such strategy, does it make sense? Do we have enough time for that? And even if we do, we need to have a lot of money invested to satisfy margin requirements. Unless you trade with large sums without any leverage.

And even more questionable are the benefits of testing on the long intervals for the most commonly used optimization methods, when a given set of strategy parameters are permutated to make the strategy work best on the historical data.

Unfortunately, it doesn’t guarantee the strategy will win when used the very next day – whatever long interval you tested it on. This is the reason we use a principally different approach.

We are developing the mechanism to adjust the strategies to the current market automatically on the fly. So, we test our automated trading strategies on 1 week long test data.

There are several reasons behind this testing interval selection. The primary one is continuity in the price quotes. If you leave a position open over weekend, you always risk hitting a price gap. If something happens during the weekend, the gap can easily be several hundred pips. And stops sometimes can not be even triggered.

Next, it takes reasonably short time to run a test on one week of quotes. is not too long to run.

Of course, big price moves can happen during the trading week, as well. However, it’s not a gap – but a very fast moving market. So you might be able to do something yourself and stops might work.

In addition, quite often such turbulence is news related and so can be predicted, as the major news releases are mostly scheduled.

Our approach is to use one week as a standard interval that is easy and quick to run and analyze. Based on the analysis, we select certain data intervals that are worth using later. Mainly, those where the strategies loses systematically.

Only these intervals are worth testing on. Markets quite often just treading water. Testing on such data is just wasting time.

So we prefer to collect a set of test cases that represent the market conditions that are difficult for the strategies to handle. Running the set is an efficient “smoke test” – if the strategy is failing, there is no need to go deeper and run longer tests.

Based on weekly test results, we can select most important parts of the data and us them later as test scenarios. They can be as short as one trading session. Often the market behavior is the same during one session, but the next session might not continue the pattern.

Best is to test overlapping new York and London sessions when the moves are most powerful.

You can use our free Forex Data Manager to slice a month long .csv data files into one week (or smaller) ones.

Smart Forex Tester Free Version At SmartForexTester.com

SmartForexTester.com is our new site that we started to host a free version of our new Smart Forex Tester product.

We already released paid version in the end of 2016. It is built on the new framework – the same we used to develop our Forex Simulator.

The new free Tester version will replace the currently available 0.9.5 software which was developed on the old framework and will be phased out.

Smart Forex Tester Free — Smart Forex Tester free version is released

As the old Tester, the new free version also uses tick-by-tick data only and can test on both historical price quotes and using inbuilt live market data feed.

Considerable improvement is added C++ support – as a means of trading strategy definition.

Also, you can use C++ environment to test EA if you have a source code. After some modifications, MQ code can be compiled in the Tester, and the interfaces are provided similar to MT to support trading operations.

Free download at SmartForexTester.com.

Forex strategy back-testing: how much historical market data is enough?

How much market data do you need for a Forex strategy back-testing? What time interval is long enough to run tests?

One obvious consideration is that it depends on the time frame you use for trading. You need to have many data points for your selected interval, to be able to make any judgement.

The longer the time frame is, the more data you will need. E.g. for M15, one hour of ticks will only give you 4 bars. For H4, you will need to have almost one day of ticks to get the same amount.

Another consideration is, how long are you going to be in the market. This depends on how you trade – do you use leverage or not. If you use leverage, it is very risky to keep a position for long in certain cases – e.g. over a weekend, as there can be a big gap at the opening. To say nothing of news release times.

These considerations should give us some idea on the minimum and maximum data interval we need to test on.

But let’s assume we have all needed tick data available and don’t have any restrictions coming from leverage. And we just want to understand, how much data do we need to test on, exactly? When should we stop testing?

The answer to this question is – it depends on the trading strategy. For the strategies that doesn’t adapt to the market (“static”), no testing can give any guarantee of success.

You can optimize the strategy parameters on 3 years data for several pairs – and it still can start losing the next day.

This is why we are working on the dynamic Forex strategy optimization. This approach requires much less test data, as well.

Basically, for the dynamically adapting strategy, you can move from “extensive” testing on long intervals, to “intensive” one – using price patterns as “test cases“. These test cases should simulate the market conditions where trading strategies were noticed to consistently lose.

This approach also saves a lot of time, as we can only concentrate on the essential behavior of the strategies.

Smart Forex Tester will support running of test batches in summer 2017.

Forex Strategy back-testing with Smart Forex Tester 1.0

Forex Simulator Offline – Practice Trading Even When Market Is Closed

Using Forex Simulator Offline is the only way to practice trading when the markets are closed. The software uses historical market data files from your computer. So, you don’t need an Internet connection.

Most importantly, you can practice any time you like. Especially on weekends when the market is closed and any demo account is useless!

Download Free Forex Simulator offline

Our Forex Simulator guarantees 100% market modeling quality, as it only uses the tick-by-tick market data. In addition, the Simulator renders the ticks strictly according to their original timestamps – with up to 1 ms accuracy.

You can download free high-quality tick by tick market data from TrueFX.com. The data is monthly CSV files, which the simulator natively supports.

The Simulator also provides an inbuilt sample market data. So, you can try offline simulation in just seconds after you install the software. The inbuilt file covers 2 full trading days (about 300K of ticks). To use it, click the Load sample data button on the Data tab.

Forex Simulator Offline -Market Data — Forex Simulator Offline – Historical Market Data

The calendar shows the interval of the data – with the start date highlighted in blue. By default, the data feed will start from the beginning of the file.

If you want, you can select any other date/time to start. For your convenience, you can use standard trading sessions (US, Europe, Asia).

Once you have selected your test data, click on the green Play button on the toolbar. The Simulator will automatically switch to the Simulation tab.

Forex Simulator Offline -Testing — Forex Simulator Offline Testing

Now, you can place market, take profit and stop orders. All as if you were trading on the real Forex market.

Download Free Forex Simulator offline

Forex Simulator Offline vs Demo Account

There are several important differences between practicing on the live market and with the Forex Simulator offline.

First off, in the offline Simulator, you can put data feed on hold. Which is obviously impossible to do if you use a regular demo account.

Why would we need it?

With pausing the data feed you can manage your time. You can take breaks whenever you need it. While with a Demo account, you are dependent on the market situation.

Secondly, you can always have market action on demand with the Simulator. With a Demo account, when the markets are moving nowhere, you have no other choice as to wait. With the Simulator, you can just load another data file.

Finally, you can also imitate the trading server delay! Especially it is important on the fast-moving market. You can see how a slow Internet connection can affect your trading.

Download Forex Simulator and try it yourself – it’s FREE!

Offline Forex Simulator is part of our Smart Forex Tester Suite. The Suite also includes Online Forex Simulator and a Free Forex Strategy Tester.

Our subscribers get free licenses for both Simulators and the Strategy Tester.

You can switch between Simulators and Tester without restrictions.

Have questions? Read Free Forex Simulator and Strategy Tester FAQ.