If you were expecting a flashy sales page, I’m sorry to disappoint you. The Tick Data Suite is geared towards individuals who are not impressed by huge colored and possibly flashing text, so all that you will read below are facts that you should know prior to purchasing your copy.
Backtesting Forex strategies is certainly one of the most efficient ways of gauging their profitability potential. I would go as far as saying it’s THE best way unless you’re in possession of very extensive forward testing results. However, with Metatrader 4 – the most popular Forex platform nowadays – backtesting is inherently flawed. Metatrader 4 does not store the actual ticks coming from the broker’s server; the best data at its disposal is data from the M1 timeframe – it only has the open, high, low, close and number of ticks for each minute. So, if it only has these for values, you might be wondering how does it produce the ticks that happened within each minute and the answer is easy: it generates fake ticks through interpolation based on the tick count for each minute. If you didn’t understand what’s the problem yet, I’ll point it out for you: the ticks generated this way are not the real ticks, they are essentially fake ticks! Not only that, but Metatrader 4 is only able to backtest your robot using the fixed spread, whereas all good brokers nowadays use variable spread! It simply uses the current spread of your broker so, for example, if you’re testing an Asian scalper robot during the day, the results will be completely misleading.
Now, if you have a strategy that deals with hundreds of pips for each trade and only closes at a stop loss or take profit, the fact that the ticks in your backtest are not the actual ticks does not really matter that much. However, if you have a scalping strategy that takes profit at 10-20 pips or if you have a strategy that follows the market closely with a trailing stop, backtesting with ticks that actually happened and with the real spread will make a world of difference.
That’s where the Tick Data Suite steps in – using it allows you to use tick data and variable spread in your Metatrader 4 backtesting to obtain an unprecedented accuracy and 99% modeling quality. Since tick data is available for free from multiple brokers, you can even test your expert advisors to see how they would perform with different data sources. By using the Tick Data Suite you can certainly perform a much better appraisal of the strategy you’re evaluating and you can gain the confidence needed to test it live. To make it even more realistic, the Tick Data Suite goes as far as offering an option that allows you to simulate slippage in backtesting.
In case you’re wondering how dramatic can the dissimilarity be, take a look at the backtests in my Fast…