Utilizing Dukascopy tick data for backtesting in MT4

To optimize an EA requires testing, and one of the best measures is historical tick data. Shuang Wu explains how to get this data into MT4 to be able to backtest your EAs.

Utilizing semi-automatic trading or automatic-trading can save a lot of time and energy compared to traditional manual trading.

However, optimizing an EA to take constant profits is not easy. There are many factors you should take into consideration, including knowing how to do backtesting of your EAs. 

In order to get the most out of EAs, it is essential to ensure your EA is running under a safe environment. This not only refers to the VPS the EA is running under, but also the speed of connection, and the execution time.

Apart from that, a liquidity provider, such as Dukascopy Bank SA for example, will always increase your chance of winning compared to Market Makers, simply because they offer fair spreads and accurate market rates. Furthermore, a liquidity provider provides accurate historical data for back-testing, which can help making decisions to improve your strategy for EAs.

The T3 Integration Bridge is integrated with tick data from Dukascopy Bank, for both charting and back-testing. The historical tick data on our MT4 client is as accurate as real markets, in both Demo and Live trading accounts.

There are many benefits of back testing. Although backtesting is not perfect, it gives you a good indication whether an EA or strategy would have worked in the past, and it provides the general direction on how you can optimize it to maximize profits and minimize the risks. Although there are many factors affecting an EA, such as real-time quotes or connection problem, it is the first step to evaluating an EA and deciding whether or not you should go further with it.

In this article, we will teach you step-by-step how to do backtesting with Dukacopy’s tick data.

Step 1: Edit counts of max bars

To make sure you have enough data to test with, you need to increase the max bars in history in MetaTrader 4. You can find it in Tools-> Options -> Charts. All you need to do is type '9999999999999' in ‘Max bars in history' box. Keep in mind this might increase the load of your PC.

Step 2: Download data from FTT

In order to make back-testing easier for our traders, our technology experts at Fair Trading Technology have converted Dukascopy’s tick data ready to an MT4-friendly format ready for our traders that can be downloaded from our web site. 

Step 3: Remove the old history files

Now you should have Dukascopy’s tick data ready for MT4. However before importing them into MetaTrader, we recommend you remove all of the history files in your MT4 directory: FTT MetaTrader 4 Client Terminal / history / FTT-Demo (or FTT-Live if you login with your Live account).

Step 4: Import the data 

Restart your MT4 client and import the currency pairs you need. 

To do this, open the History Center under Tools -> History Center, find the currency pair and timeframe you want to import, click "Import", browse to the file and click "OK". The data will then be imported into MT4.

You are now ready to run a backtest for your EA. If you don’t know how, just follow our tutorial: How to backtest your EA with the T3 Integration Bridge.

Updated Feb. 21, 2012 to amend the procedure to include the data now available for download on the Fair Trading Technology web site.