Most forex scalping systems are based on linear regression channels or support/resistance lines. For example our expert advisors: Stomper and IntellectualPro. Stomper based on support/resistance lines and  Intellectula pro based on smart adaptive linear regression channels.  learn more about adaptive regression channels


But a lot of forex scalping systems are based on forex indicators. For example our Forex Scalping system SC-market.
Expert Advisor SC-market based on two standard indicators RSI (Relative Strength Index) forex indicator and SMA (Simple Moving Average) forex indicator.



We use two types of signals for position opening.
First signal. RSI and SMA combination. For short position, price should be higher than SMA and RSI should be located within the prescribed limits.  For long position, price should be lower than Simple Moving Average indicator.

Second signal.  Price reached a peak within a few bar.

Also we developed several filters and  special modules for this expert advisor:
Time Filter.  Order can only be opened in a given interval of time.
Smart Take Profit. Take Profit can be increased  or reduced depends from order’s lifetime. And Take Profit can be increased  or reduced depends depending on the time remaining until the end of the trading session.

Expert Advisor SC-market shows stable positive result within 600 days



Learn more about Expert Advisor SC-market

Read also "expert advisor "Stomper" working mechanism explanation"

BJF Trading Group inc.
http://iticsoftware.com

        

I would like to explain how to test metatrader indicator on historical data. For example, we can test our new CCI-divergence metatrader indicator on gbpusd curency, time frame H1.

1. Open GBPUSD chart time frame H1
2. On the left hand side, look for the "Navigator" window
3. Under the "Common" tab, look into the "Expert Advisors" directory
4. Drag (Click and drag) the expert advisor   (we recommend to use standard build-in expert advisor MACD) onto the chart
5. Run metatrader strategy tester for expert advisor in "visual mode"



6. Strategy tester should open new GBPUSD H1 window
7. Press || (pause) button  (Strategy tester)



8. Under the "Common" tab, look into the "Custom Indicators" directory
9. Drag (Click and drag) the indicator onto the chart (visual)
10. Press Run button  (Strategy tester)

We have tested CCI Divergence indicator since 1 Jul 2010

        

We’ve been receiving a lot of questions for some time in connection with release of new metatrader account copier Multiterminal “PowerTradeCopier”. The most widespread question is: “What is the difference between CopyToolPro metatrader account copier and PowerTradeCopier Metatrader Multiterminal ?”








CopyToolPro is a metatrader account copier, which was created several years ago and is currently the most popular copier among traders, money managers and brokers. This tool won such popularity thanks to high reliability and wide range of capabilities, such as:
-    copy trade operations between different MetaTrader4 brokers (market and instant execution, 4 and 5 digits quotes etc.);
-    CopyTool can duplicate trades and merge trades;
-    CopyTool copies all types of market and pending orders;
-    Copies orders opened by expert advisors or manulally;
-    CopyTool has a lot of customizable settings.



The metatrader account copier “CopyToolPro” can also be adapted to needs of any trader or broker. We’ve developed hundreds of various additional modules and filters on order of our clients.

The copier has the following shortcomings:

- There is a small delay in the process of copying (about 1-2 seconds), because the copier is based on scripts. Such delay is insignificant for the majority of traders and brokers;
- All slave terminals (subaccounts) should be launched for correct work of the copier;
- Master and slave terminals should be launched on one local computer or VPS.

Read more about Metatrader acount copier CopyTooPro on our website   |  Blog

Such approach isn’t quite acceptable for forex signals providers, since clients can refuse to provide their account data to the signal provider.

We’ve been receiving many letters with request to create a copier, which can work in a local network, i.e. when master and slave terminal are on different computers. Such configuration is necessary for forex signals providers. Master terminal sends signals to slave terminals, launched on different computers, and each slave client adjusts copying parameters independently. Master can add or block any slave account, for example, if a client didn’t make payment in time.



We studied MT4 thoroughly and created API, while working on this project. Thanks to it we developed a multiterminal “PowerTradeCopier” , which allows to work on a single computer or in the local network. It isn’t necessary to launch all slave terminals for correct work of the “PowerTradeCopier” multiterminal; it is very important, when you manage large number of accounts. And also delay during copying is equal to zero thanks to the fact that the copier uses MT4 protocols. It’s even lesser than delay of metatrader. We succeeded to achieve it, because metatrader is an upper level application with low priority and it uses only one trade flow. Our program works at the level of Windows core and can use about 250 connections; it considerably increases reliability and speed.

regards,
http://iticsoftware.com

        

Developed by Donald Lambert, the forex indicator Commodity Channel Index (CCI) was designed to identify cyclical turns in commodities.The assumption behind the indicator is that commodities (or stocks or bonds) move in cycles, with highs and lows coming at periodic intervals

CCI calculation

      Calculate the last period's Typical Price (TP) = (H+L+C)/3 where H = high, L = low, and C = close.
      Calculate the 20-period Simple Moving Average of the Typical Price (SMATP).
      Calculate the Mean Deviation. First, calculate the absolute value of the difference between the last period's SMATP and the typical price for each of the past 20 periods. Add all of these absolute values together and divide by 20 to find the Mean Deviation.
      The final step is to apply the Typical Price (TP), the Simple Moving Average of the Typical Price (SMATP), the Mean Deviation and a

Constant (.015) to the following formula:

CCI = ( Typical Price - SMATP ) / ( .015 X Mean Deviation )

CCI Divergence shows divergence between CCI indicator and price.

The signal to buy comes when new Low-fractal is below the previous one, and corresponding CCI meaning is above the previous one The signal to sell comes when new Up-fractal is above the previous one and the corresponding CCI meaning is below the previous one. Learn more about divergence conception

GBPUSD H1 period: 24 Jun, 2010 -8 Jul, 2010




learn more about our divergence metatrader  indicators

regards,
http://iticsoftware.com

        

Forex market volatility is the most important characteristic used for the development of short-term trading systems (forex scalping systems etc.). Volatility refers to the amount of uncertainty or risk about the size of changes in a currency's value. A higher volatility means that a currency's value can potentially be spread out over a larger range of values. This means that the price of the currency can change dramatically over a short time period in either direction. A lower volatility means that a currency's value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.

Logically, any currency is typically most active when its own markets are open. For example, the euro’s, British pound’s and Swiss franc’s volatility is  higher when the European session is active. It happens because banks and traders from a specific country will use their domestic currency in the majority of their foreign exchange transactions.

Every currency has specific period(s) of time of high and low volatility therefore majority of scalping systems work during the period of low volatility. That’s way most scalping systems are   limited in time. For example our most popular forex scalping expert advisor stomper .  It’s trading hours are determined between sessions (For example after the closing American trading session) when the market is quiet.  But quiet market can happen at any time, as well as the possibility of intense price movement after the closing American trading  session.. That’s why it is very important to have a reliable of quite periods determination.

As the forex market volatility directly connected with the volumes metatrader has a “Volume” indicator method. It is a count of “ticks” received in a time period. This indicator is not very informative. We think that Volume Rate of Change is more useful as it demonstrates the speed at which volume is shifting.




This can turn out to be rather helpful as almost each essential chart formation, such as peaks, bottoms or breakouts, is followed by a sudden volume raise.

( Volume - Volume n periods ago ) / Volume n periods ago


Using this methodology for identifying the quiet areas of forex market has been testing and has been very successful. This was proved with expert advisor V-Trader which uses this methodology.
Expert advisor was tested on demo account and we have added expert advisor to real account. Expert shows good performances.



Click to view real account monitoring

The "V-Trader"expert advisor is a completely automated trading system; it is based on the channel strategy and the analysis of the market volatility. The expert advisor opens orders from the channel border (we do not use the channel of linear regression and high low levels) at the moment of low volatility and closes order at contact with the opposite border of the channel. The expert advisor does not trade when volatility is high. learn more...

        

We have added additional column to cumulative back test generated with MT4MultiStrategiesReport forex software .






cumulative back test example Click to view

Read more about cumulative back test

        

It is very important to choose a portfolio of expert advisers in such a way to get the   minimum drawdown  for equity curve. Each expert advisor in the portfolio should reduce drawdown and protect the deposit from the margin call. This can be achieved by selecting the right combination of expert advisers and the correct lot size for each of them. It is  difficult to implement, because build in metatrader 4 tester doesn’t support multi strategies testing.

 I would like to explain how to receive summary back test for several expert advisors and calculate summary drawdown and other important parameters.

First, I would like to explain what mean each parameter in the strategy tester’s report.



Bars In Test – Displays the depth of the history on which the modeling was based.

Ticks Modelled – Displays the size of the modeled sequence. Every record of the sequence represents the bar state (OHLCV) at one or another moment. Different bar states can be modeled depending on the timeframe, modeling method, and presence of history data from smaller timeframes within a bar.

Modelling Quality – Calculated according to the following formula. This should be 90%. If not, read the article on downloading and setting up history data.

ModellingQuality = ((0.25*(StartGen-StartBar) +0.5*(StartGenM1-StartGen) +
0.9*(HistoryTotal-StartGenM1)) / (HistoryTotal-StartBar))*100%;

Gross Profit – The summed up profit for all profitable transactions;

Gross Loss – The summed up loss for all unprofitable transactions;

Total Net Profit – The Gross profit minus the Gross loss.

TotalNetProfit = GrossProfit – GrossLoss

 Profit Factor – Profit factor, shows the ratio between gross profit and gross loss. The larger this number is, the better.
       
ProfitFactor = GrossProfit / GrossLoss

Expected Payoff – Calculated as follows:
       
Expected Payoff = (ProfitTrades / TotalTrades) * (GrossProfit / ProfitTrades) –(LossTrades / TotalTrades) * (GrossLoss / LossTrades)

 Absolute Drawdown – Absolute drawdown is the difference between the initial deposit and the smallest value of balance within testing:
      
 AbsoluteDrawDown = InitialDeposit – MinimalBalance

Maximal Drawdown – The highest difference between one of local upper extremums of the balance graph and the following lower extremums:
       
MaximalDrawDown = Max of (Maximal Peak – next Minimal Peak)

You can make back tests for each expert advisor for same period and merge all reports with excel, but we have developed forex tool “MT4ReportParser”.  This forex software allows merge several back tests into one result, which looks identical to the standard metatrader 4 report.



MetaTrader MT4ReportParser usage

1.Run MT4ReportParser.exe file

2.Press "Add reports to merge" button and select all the back tests (html format) that you want to merge in the resulting report (back test)

3. Press "Result report filename" button and select file name and destination folder for the resulting report (back test)

4.Press "Merge reports" buttom

Example:

We have merged back tests (metatrader strategy tester reports) for our expert advisor MarketUniverse

source files (back tests for 10 currencies):

GBPUSD strategy tester report ,
EURUSD strategy tester report ,
USDJPY strategy tester report ,
USDCAD strategy tester report ,
GBPJPY strategy tester report ,
GBPCHF strategy tester report ,
EURCAD strategy tester report ,
EURGBP strategy tester report ,
AUDUSD strategy tester report ,
EURJPY strategy tester report

result:



Click to view the resulting report (was generated with MT4ReportParser)

Learn more about MT4ReportParser...



BJF Trading Grpup inc.
http://iticsoftware.com

        

Summary: The majority of people who want to invest in the Forex market do not know how to choose the right broker for themselves. If you get the right broker and expert advisor, then you will be gaining profit in no time.


If you want to know how to choose the ideal Forex broker, then you will want to read this article. Choosing the right broker is the key to success in Forex trading. A Forex broker will help you in Forex trading, especially if you are new to Forex. Here are a few tips on how to choose the right broker:

   1. Approachable
          * It is of utmost importance to find a broker who can be reachable whenever you are facing trouble in the Forex market. Although many things are done through the Internet, it is crucial to talk to your broker and ask for some advices. Many of these brokers are experts who will be able to suggest different strategies for different conditions based on the market. Furthermore, a broker can help you reduce your stress level and fear in case any problem appeared in your account.
   2. Trade limitations
          * If you are new to Forex, you certainly would not want to start off trading with a big lump sum of money. Being an inexperienced trader, you would just throw all your money down the drain. Always look for a broker who allows you to enter any trades regardless of your initial trade amount. Some of them might even advise you to start off by investing in mini lots.
   3. High leverage
          * Leverage can be defined as the number of lots you can buy with your investment. The higher the leverage offered by the broker, the better it is. For example, if the leverage is 100:1, then you can buy 10,000 lots for only $100. The larger the amount of lots purchased will ensure higher profit gained.
   4. High spreads
          * Spreads can be defined as the difference in the buy and sell rates of the currencies. Obviously, higher spreads will allow you to have much higher returns. Therefore, you should always look for a broker who offers the highest possible spreads.

        

Summary: How do you decide which pair of currency is suitable for range trade? Find out in this article.


A range trade is actually known as a short-term consolidation which changes from time to time. A good way to make profit in range trade is to choose non U.S dollar pairs and focus at other type of currencies.

As all of us know, the trend in forex usually follows U.S dollars. Therefore, to avoid trend bias, choose a non U.S dollars pairs and work on the ranging forex trading strategy. If you can observe clearly on what have happened in the past 6 months, all pairs involving U.S dollars did not show a long lasting range trend and this has caused losses to most of the traders.

Most of the traders like to trade using EUR/USD pair and if you study the chart closely for its past performance, you realize that the chart is either moving upwards or downwards. Unlike non U.S dollars pairs, the chart usually stays within some values of pip range and the trading is more stable and volatile.

However, not all U.S dollars pairs show a non-volatile range in forex market. As a smart trader, it is good if you can observe the trend for each currency pair for a certain period of time by looking at the chart or study the interest rate differential.

So, how does interest rate differential affects the volatility of a currency pair? Interest rate differential is the difference of bank interest rate offered by the currency pair. For example, interest rate for Australia’s bank is 3.75% and Japan’s bank is offering 0.10% and the difference (3.65%) is called the interest rate differential. Observe also the historical data back in few years ago to determine if the currency pair is a volatile pair or not.

In conclusion, there are two considerations to take note while using ranging strategy to trade. First is to choose non U.S dollars pairs to avoid bias and second is choose pairs with low interest rate differential. Always study the chart and historical data wisely before deciding to trade.

        

Expert Advisors AutoOptimizer Installation and Using

1. Create new folder AutoOptimization on disc C (or create folder with your own name in your own place)
2. Copy MTester.exe and StartMTester.exe to folder AutoOptimization
3. Add strings to Expert Advisor code:
extern int OptimAuto=1; // 0- switch off 1- switch on auto optimization extern string OptimEveryTime="10.45"; // auto optimization start time (local PC time)
extern string OptimEveryWeek="1,2,3,4,5,6,7"; // day (1 –Monday etc.)
extern string OptimEveryMonth="10,20,30"; // day of month
extern int OptimPeriod=30; // period for optimization, day






4. Add Expert advisor to chart and set OptimAuto=1 and set optimization time according your needs. You must specify the time in 24 hours format. For example 1.30 pm you should set 13:30

5. Run MTester.exe file
6. AutoOptimazer should create folders automatically:
Folders:
HTML_TESTER optimization reports (with data and time)
LOG_TESTER log files for program
RUN_TESTER log files for experts
SET_TESTER *.set files for optimization
Files in these directories are placed in subdirectories under the names MetaTrader 4 terminals.





7. Open strategy tester and create and save .set file with optimization parameters to folder “SET_TESTER” sub folder “your Metatrader name”
File name should be: expert advisor name+'_'+currency+'_'+ timeframe+'.set'


We have tested several expert advisors optimized for period since January 2008 till December 2009 without
AutoOptimizer and with AutoOptimizer with monthly re - optimization. Results of tests with AutoOptimizer  shows significantly more profits with less drawdown.

Learn more about AutoOptimizer forex software