We have been testing our new Automated Trader for 8 month from October 2020. The PPA based strategy stayed profitable. See the detailed report of our 8 month long GBPUSD live test.
Trade copier is the latest part of our flagship product – Smart Forex Tester Suite. We added it after recently conducted testing of the Automated trader.
Trade copier uses in live trading the market timing signals that are generated by our automated trader running on the TrueFX data feed.
The feed provided by TrueFX is unfiltered. You can have over 10K ticks an hour. And it’s of very high quality. Our strategies using this feed achieved very positive results.
However, retail traders can’t execute orders via TrueFX. This is why we decided to use the quality signals to be executed over the MT connector that we already have.
We have published 2 test reports on our winning day trading strategy that is included in our Automated Trader part of our Smart Forex Tester Suite.
In our first monthly test on EUR/USD and GBP/USD the baseline strategy was consistently profitable when run on the TrueFX live data feed.
In the second weekly test on GBP/USD the version1 of the baseline strategy made over 400 pips profit when the pair’s volatility was only 205 pips.
The screenshot below shows how the profit was accumulating on all the trading session from Tuesday London thru Friday NY.
Weekly profit over 400 pips on GBPUSD with volatility 200 pips
The strategy was active all the time. The pattern we see: gains during volatile UK trading (dashed vertical lines) and losing small in calm markets after the NY session.
The profit curve is very smooth – no big single losses. The longest losing streaks during Asian sessions resulted in only small absolute draw-down.
Total win ratio of 50.2% means that an average wins were substantial. If paused during the Asian trading, the strategy would deliver much higher win ratio.
A long awaited feature of Optimizing Pivot Point Analyzer parameters is finally available – in the just published new release of our flagship product – Smart Forex Tester Suite.
Optimizing Pivot Point Analyzer parameters makes the detection of the market extremes more accurate, because now you can adjust the detector parameters to best fit the recent market price action.
A convenient way to get the data for the optimization is to save the latest ticks acquired in the Suite when you run it on real-time data feed. For that, go to the Real time tab and use the Save ticks button to store the ticks to a file.
Then on the Data tab, load this file and go to Optimizer tab. There select the ranges for the parameters, and the accuracy you want (number of iterations). Then click on the Optimize parameters button and the Optimizer window will open.
The upper table shows the results of the optimization, and you can also monitor the process on 2 inbuilt graphs. When the software completes the calculations, you can plot the graph for each set of parameters. For that, select a line in the table and click Plot selected button.
When you finished, click Close button. The Optimizer window closes but the software will copy the results into the table on the Optimization tab. There you can select the best parameter set and make your strategy use it by clicking the Apply parameters button.
For each price extreme, the optimizer calculates its quality. The algorithm evaluates the extent and speed of the price change after the signal.
Maximum quality corresponds to the situation when the price immediately goes in the direction opposite to the signal, e.g. decreases for a market top signal.
The Quality parameter in the result table is an average of all the extremes detected in the single test.
In the future versions, we may modify the the software to run this optimization in a rolling fashion on the background.
In addition this release will feature the redesigned Simulation GUI. Below is the prototype picture. Stay tuned and monitor your emails for the release email.
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Day trading signals generated by Pivot Points Analyzer (PPA) in real-time help you enter the markets closely to its extremes. It is essential, as you can front-run many of those who only use lagging indicators. And it makes opening a profitable position much easier. Both manually and with trading automation.
We are currently finalizing a very important new PPA feature. Now, you can optimize the PPA parameters dynamically, i.e. adjust them to the current markets.
With the optimized parameters, PPA generates more accurate day trading signals.
Such optimization is needed, because the markets don’t always behave the same way. To understand whether if optimization can help, we did the following study.
We ran the same day trading strategy only on Asian trading sessions for one month. The strategy only used the PPA signals to enter and exit the markets. During all the tests, the PPA parameters stayed the same.
We picked Asian session because they are rarely very volatile.
Overall, the test was profitable. We investigated the worst session and could turn it to a profit by only adjusting the PPA parameters for this session.
This adjustment made the signals match the market extremes much better. And trades became profitable.
It is very important to note that the parameters stayed the same during the session!
Why is this important? This means the changes in the markets’ behavior doesn’t happen very fast. Giving us enough time to run optimization to adjust to the change. And also profit from optimized results.
In the first version of the optimizer you run it manually. You can configure the time span you optimize on.
Enhancements planned for the optimizer include running the optimization on the background. This will make it possible to optimize in a rolling fashion. For example, run it every time we got 500 new ticks. Or every time a new PPA signal is fired.
In addition, the new product inherits all the functionality of the Forex Simulator Plus. However, it is the MT integration feature that takes the Simulator to the next level.
First of all, before the integration, the Simulator could only work on Forex. Now you can practice on any other market that your broker provides.
In addition, the Simulator can store the real-time prices from the MT data feed on your computer. So, later you can run the Simulator offline and use the data you saved. Which is quite handy during weekends when there is no active trading.
However, the main benefit the MT integration will give you is signals. Namely, now you can export the Pivot Point Analyzer signals to MT. What is important, the signals are real-time. The Simulator receives a tick from MT, and if this tick triggers a signal, MT will receive it in the response for this same tick.
This is the main reason why we call the new simulator “Smart”. This unique feature turns the simulator into a powerful real-time market timing tool. Which you can use in both practice and real trading.
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.
Indicators seem to predict the Forex market at times. However, it’s difficult to turn this into profit.
A typical example of that is overbought conditions in oscillators. So, if the RSI is already very high (over 80), this condition points to reversal. But the problem is in timing. If you followed markets for some time, you know that such powerful trend can go on and on.
Siimilar situation is with Elliot waves. Even though we might have a very clear impulse wave pattern, the moment of reversal is hard to pinpoint. It is known that 5th waves can quite often be extended.
So basing the trading on indicators is difficult. In addition, the indicators are widely known, so a lot of traders might wait for the same event. And it is known that when market is commonly expected to go in some direction, it quite often behaves completely differently.
The only sure thing we can predict in the Forex market is that there will be ups and downs. Regardless of the market direction. Ups must be followed by downs and so on. This comes from the nature of the market – price discovery process.
The shorter is the timeframe, the better your timing can be. But if you try timing on e.g. M30 graph, you might lose hundreds of pips before the reversal occurs.
On the other hand, using the tick graph, even if you can time the reversal, you can’t tell the big picture. The pivot point can just be a local extreme.
In our opinion, the only way to tackle this is to react very quickly by generating pivot points signals on the tick graph and then use them to predict the action on longer timeframes.
You will never predict all market movements but you might be lucky more often than unlucky. You just need to be faster than others.
Many try to act only when market starts moving in a certain direction. This is already late. Here automated algorithms are the only way to go.
Trading manually, you can’t react as fast and – most importantly – equally error free for long time. To say nothing of the natural needs to do breaks.
We are developing the price actions algorithms that can be used for trading automation. We based them on our own pivot points detection algorithm. The figure below show the sample results of the detection in real-time.
Predict the Forex market? Pivot Points
You can try it with our Pivot Points Analyzer software (free download).
Optimizing Pivot Point Analyzer parameters makes the detection of the market extremes more accurate, because now you can adjust the detector parameters to best fit the recent market price action.
Stay tuned and monitor your emails for the release email.