How to test the indicator in the MetaTrader 4 terminal?

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Almost all traders use technical indicators . More and more new indicators appear on profile resources - modifications and optimized versions of classic tools, compilations, fundamentally new developments, etc.

Why do you need to test indicators?

Often, at first glance it is quite difficult to understand the effectiveness of an indicator. And surely every trader has come across such indicators, especially those that are "sinful" with it arrow indicatorswhich show a signal to enter, and after a while redraw their readings.

A programmer can look at the indicator code, but what should a non-specialist do? Test the indicator in real time mode? It takes a long time, and sometimes it is costly. And this is where the MetaTrader 4 Strategy Tester comes to the trader's aid.

Let's understand how to test the indicator in the strategy tester of MetaTrader 4 terminal?

6 easy steps to test an indicator in MT4

First of all, it should be noted that the function of testing indicators in the Strategy Tester is available only for MetaTrader 4 build 830 and older.

You can test any indicator, both standard and loaded, however, it should be said that sometimes there are indicators that simply refuse to be tested. Even technical specialists find it difficult to answer the reason.

Let's take standard MACD indicator MetaTrader 4 platform, and on its example we will give step-by-step instructions for testing the indicator in the strategy tester.

Step 1. Download quotes history

First, you need to load the history of quotes for the currency pair, on the chart of which we will test the indicator, into the terminal. Detailed instructions on how to get the quotes history are described in the following sections hereso we will not dwell on this step.

Step 2: Launch Strategy Tester in MT4

Next, you should enable the strategy tester itself. To do this, click the magnifying glass button on the toolbar of the MetaTrader 4 terminal.

Once the strategy tester is running, you need to configure it and the indicator under test.

Step 3: Setting up the Indicator Tester

Let's start setting up the strategy tester and indicator.

The drop-down window provides a choice of the tested tool - "Expert Advisor" and "Indicator". Select "Indicator".
In the drop-down window select the indicator we need. In our case it is the MACD indicator.
Select the currency pair on which we will test our indicator.
Choose a timeframe for testing.
The "Indicator Properties" button allows you to customize the tested indicator itself. When you press it, a window appears, where you can change the indicator parameters at your discretion.

Setting the parameters of the indicator under test

If you click on the "Symbol Properties" button, a window is displayed that describes the contract specification of the selected currency pair.

The "Open chart" button actually opens the chart on which the indicator will be tested.

Clicking the "Change indicator" button in the strategy tester allows you to change the source code of the indicator (if it is present in open form) in MetaEditor.

Step 4: Customize testing parameters

Next, you should configure the test parameters.

Configuring test parameters — Setting the indicator testing parameters

Item "Use date" allows you to set the start and end points of the time interval, on which we would like to test the indicator.
Visualization parameter - is the speed of visual display of the testing process. It can be adjusted using the slider. It is recommended to set the slider closer to the middle of the scale, so that the test speed allows you to clearly see the indicator readings. Unfortunately, the slider setting is specific, it takes some getting used to. It is also important to remember that you cannot rewind the optimization process, you can only slow it down.
Selection of data analysis method. The choice of method depends on the principles of the indicator construction: if it is redrawn on the last bar, then you need to work on all ticks, if not, then work on the opening prices.

Step 5: Start testing the indicator

So, the indicator and the tester are prepared, we can start testing. To do this, press the "Start" button.

After pressing the "Start" button, the data is updated for a few seconds, after which the price chart with the indicator is displayed and testing begins. The slower your Internet is and the longer the testing period is, the longer the chart may take to load.

It may even happen that it never gets loaded. In this case, we recommend to go back to the test period selection in step 4, or to load more data in the way described in step 1.

Step 6. Managing the process of indicator testing in MT4

The process of testing the indicator can be controlled.

A bar showing the testing progress. Important note once again: the strategy tester is not a player, you cannot rewind.
The "Pause" button, pressing which pauses testing of the indicator. The function is extremely useful, because by pausing testing, you can add technical lines or a technical indicator to the chart.
While testing the indicator, you can move the slider to achieve a comfortable visualization speed.
The "Stop" button stops testing of the indicator. At the same time, the chart, on which the testing was conducted, is not closed, which allows you to once again review the testing areas that cause doubts.
Using the buttons on the toolbar you can customize the price chart display according to your preferences.

The "Journal" tab contains comments, if there are any in the indicator code.

Conclusions

Testing indicators in the strategy tester has been implemented in MetaTrader 4 terminal before - you can do the same thing, testing any expert and throwing different indicators from the list onto the tester. However, not all users understood it and knew how to use it, so the appearance of such a simple function in the tester opens the eyes of many beginners in trading to the possibilities of the terminal.

For example, profile resources are overflowing with "Grails", which, if you believe the descriptions, bring millions of percent of profit. Such indicators should first of all be checked in the strategy tester to avoid paying for an advertising trick with your deposit.

You can check the arrow indicator for overdrawing and see for yourself whether the indicator corresponds to the description and whether it is worth using it in trading on a real deposit.

Tip! How to test manual trading strategies in MT4?

Testing the indicator will be very useful when optimizing manual trading strategies. While testing the main indicator, press pause, open the Navigator, select other components of your strategy and place them on the chart. By turning testing back on, you will be able to analyze the performance of the entire strategy, noting entries and exits. By changing indicator parameters or adding new ones, you will be able to better customize your tactics without wasting time or incurring unnecessary losses.

Now you can clearly see that testing an indicator in the MT4 Strategy Tester is exactly the case when the time you spend saves you money.

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