Forex Blog

Today I’ve added a new Forex broker to the list on the site — TradeView Forex — another broker that is operated by the financial company Rosenthal Collins Group, LLC (first broker from this company, which hit my list, was RCG fxtrader). TradeView Forex offers MetaTrader 4 platform without CFD trading, limited demo accounts (30-day limit) and rather tight spreads (from 2 pips). For me, it doesn’t look like a great broker, because it requires a lot of paper work to open an account, doesn’t support convenient ways of account funding and offers quite a limited amount of trading instruments. But for some traders it might seem to be an interesting Forex broker, because it’s registered with NFA and offers good scalping opportunities.

MasterForex existed on-line since 2006, but being very similar to other MT4 Forex brokers it has never received such traders’ community attention as their competitors (e.g. LiteForex or FXOpen). As its rivals MasterForex accepts WebMoney, e-gold and wire transfer for deposit/withdraw operations, trading from $1, MT4 platform, CFD trading and a flexible leverage. Unfortunately, like many other MetaTrader brokers it’s not registered with NFA, CFTC or FSA and resides offshore on the Seychelles. But for starting your way in Forex this is still a good broker, because of its trading conditions that are very easy for the newbie traders.

I’ve added a very new Forex broker to the site today — Forex-Metal. Its website is still very raw and there is not very much information about this broker on the internet. But I thought that it should be listed because it has one rare feature — it supports both MetaTrader 4 platform for trading and PayPal payment system for deposits and withdrawals. It also supports WebMoney and wire transfers for billing and also offers CFD trading (as almost every MT4 broker). Of course, this broker is still very new, it’s not regulated and it has no reputation, but it may be an interesting opportunity to start trading Forex. Anyway I don’t recommend depositing too much funds in Forex-Metal before it becomes more reputable.

Today’s update to the MetaTrader expert advisors on my site isn’t very original. For many people MACD Sample expert advisor was the first EA that they tried on the MT4 strategy tester. It’s a well known sample advisor from MetaQuotes, designed to show the basic Forex strategy implementation for the MQL. The one that is now freely available on my site differs slightly from the original version. I’ve decided to make some enhancements and optimized it for GBP/USD pair and H4 (4 hour) timeframe.

In a one year backward test it made about 44% of the initial deposit with 0.3 standard lot position size. The drawdown also wasn’t small, but 10% is quite good, in my opinion. Download this expert advisor and try it for yourself. If you get some interesting results with it on forward tests, don’t hesitate to contact me.

FxPro is a relatively new MetaTrader Forex and CFD broker, which I’ve found out recently. I’ve seen the ad for this broker on some cable channel and decided to check it out on-line. Not many Forex brokers advertise on TV nowadays, so I was kind of interested. What I really didn’t like a lot about FxPro was their website — speaking flash marketers isn’t something I expected from the good user-friendly website. Some of the site’s links didn’t work for me (FireFox 2.0.0.12) as well. They also have some funny preproduction artifact in the Trading Terms section:

FxPro has no minimum or maximum restrictions for deposits or withdrawals
NOTE: Query the above information with earlier reference US$ 100 Minimum

The broker itself is rather interesting — it offers 1.8 pips spread on EUR/USD. That’s a record for the fixed/non-ECN spread for real MetaTrader 4 accounts as far as I know. FxPro also accepts PayPal payments, which is quite rare for the MT4 brokers. It’s also registered on Cyprus and is regulated by their SEC. The minimum account for this broker starts with $100.

It started eleven days ago on the ForexFactory forum, but I’ve read it first about a week ago on a TalkGold forum’s thread titled “Mt4 Brokers Are All Scam Brokers By Definition”. Of course, I’ve got interested in this topic because I’ve been trading on MetaTrader brokers’ accounts for almost two years and I have never thought of them being a scam “by definition". That made me read both of the threads thoroughly.

Here is the main problem that is pointed out in those threads. Back in February 2006 MetaQuotes announced a 5-day test of the Virtual Dealer Plug-in on the demo trading server. This plug-in was designed to imitate “real dealer work — random time of answer, requote etc [sic!]“. Eleven days ago a post on ForexFactory forum shows a part of some document’s scan describing plug-in’s functionality, including such things as “automated moving up the Limit & Stop Level and Freeze Level according to the preset list of news time”, “disabling (setting, modifying, deletion) of pending orders during news receiving”, “Max Losing Slippage”, “Max Profit Slippage”, etc. Thread starters and many other forum participants believe that this plug-in is being used in all MetaTrader 4 brokers on real trading accounts and that’s what making all such brokers the cheaters. The fact that MetaQuotes deleted all threads about the Virtual Dealer Plug-in on their forum added even more confidence to those traders.

So, what now? Personally, I can say that there’s no actual proof that this plug-in is used on real accounts on any of the MT4 brokers (I am not saying all). I am almost sure that this plug-in (or its newer version) was used during the Automated Trading Championship by MetaQuotes (this competition was for demo accounts). Another point — even if this plug-in can be used on real accounts and is used there by some of the MT4 brokers, it doesn’t imply that all of them are using it and are outright scams.

What will happen when more traders will read about this problem? Those, who thought that the MetaTrader brokers are evil, will definitely become more sure in their belief, those, who didn’t mind before, most probably won’t mind this problem too.

What should you do in this situation? I don’t know, but I’ll continue to trade with the brokers I’ve been using for a long time now, if I find that they hunt my stops or have a high slippage in their favor I will immediately switch to another broker. But I don’t think that it’s a good choice to leave a broker, with services of which I am currently satisfied, just because of some suspicious plug-in’s existence.

Recently I’ve been contacted by the manager of Forex Trading Edge. It’s quite a new Forex broker that started to operate near the end of 2007. Forex Trading Edge is the introducing broker for Forex.com broker. Usually I don’t like to list the introducing brokers as the separate entities, but this one got my attention, because it offers a MetaTrader 4 platform, something that Forex.com is missing. Besides MT4, it also offers original trading platform of Forex.com and the NinjaTrader platform. Payments methods are limited — only wire transfer, checks and credit cards — no e-currencies. Another disadvantage that Forex Trading Edge has is that it’s not accepting citizens of the United Kingdom. But for other Forex traders that wanted to join Forex.com, but prefer MetaTrader 4 over other platforms, this is definitely a good choice.

There are many free MetaTrader indicators available on-line, but some people still enounter problems in attaching these indicators to a chart or even compiling them when needed. This simple user’s tutorial was made by me for those that want learn attaching custom MT4 indicators.

1. Download custom MT4 indicator and save it to the ‘indicators’ folder inside the ‘experts’ folder inside your MetaTrader’s installation folder:

2. If it’s already compiled (.ex4 file) then fine, if not (.mql file) - double click it with your mouse and it will be opened in MQL editor (this editor is standard for every MetaTrader 4); click the ‘Compile’ button at the center top of the editor window - the indicator will be compiled and ready to be attached. There might be some errors or warnings during the compilation, but in most cases there shouldn’t be any. You can try and fix those errors, but usually it takes some time and programming skills to do this.

3. After you get the .ex4 file in your indicators folder (through compilation or download), you can start using it with your MetaTrader platform. All you have to do is to attach it to the chart. If you know what you are doing you might also want to change some of the indicator’s input parameters.

OK. Now you can enjoy your new MT4 indicator and hopefully - better Forex trading results.

Backtesting MetaTrader expert advisors on historical data is a good way to test a strategy. But testing on the limited data supplied with MT4 installation gives a very poor quality of testing (usually below 50%). So, how to achieve a 90% quality in backtesting of MT4 expert advisors? It’s not that hard really, just follow this simple tutorial and you will able to test any MetaTrader EA.

1. Download a new MetaTrader 4 installation and install it to a separate folder. Be advised that a good MetaTrader historical data take up a lot of disk space, so install it to a drive with at least 1-2 Gbytes of free space. For download MT4 installation I recommend official MetaQuotes site.

2. After you install your MT4, don’t run it yet. Go to the folder you have installed it to. Go the ‘history’ folder there and delete all folders there (the actual folders names inside the ‘history’ folder may be different from those on these pictures):

3. Run the newly installed MetaTrader and open a free demo account with whatever broker it will be offering to you (official MetaQuotes installation offers random brokers for demo account opening in its MT4). Login to your account and close all open charts (if any).

4. Adjust the MetaTrader options to allow larger charts (more bars in history):
The close your MetaTrader.

5. Download a quality historical data for every currency pair you want to test your expert advisor on. I recommend Alpari History Center for this - download M1 data for each of the currency pairs you need.

6. Unzip the archive with M1 historical data somewhere. Rename it to comply with MT4 standard naming - i.e. EUR/USD M1 chart should be named EURUSD1.hst, GBP/USD M1 should be renamed to GBPUSD1.hst, etc.

7. Copy the renamed history file to your MetaTrader’s ‘history’ folder into your broker’s folder (overwrite if prompted):

8. Launch MetaTrader 4 again. Don’t open any charts on-line, open your downloaded M1 chart offline (example shown for EUR/USD chart):

9. It might take some time for the actual chart to load, but it’s OK. Now you need to convert M1 history to every timeframe you will need. For this you need to use a period_converter script which is a standard feature of all MT4 platforms. Run it from the Scripts tab and set its ExtPeriodMultiplier input parameter to the number of minutes in the desired output timeframe. For M5 enter 5, for M15 enter 15, for M30 enter 30, for H1 enter 60, for H4 enter 240, for D1 enter 1440, for W1 enter 10080, MN isn’t convertible as there is no fixed amount of minutes in one month:
10. Wait for the script to finish its work (may take up some time; it’s more than 2 years of data after all):

11. Repeat steps 8-10 for all timeframes you want to get.

12. Repeat steps 5-11 for all currency pairs you want to test your MT4 EAs on.

13. Voilà! Now you can enjoy a 90% quality backtesting and test every expert advisor you want on the time periods of more than 2 years. Good luck with your trading!

I’ve added a new MT4 indicator - Var Mov Avg - based on the varying period moving averages crosses. It can be used as a current trend indicator and can be very good on the trendy markets. On the flat market it will show some bad picture, but it can be filtered out. This indicator also produces a sound alert every time it detects a trend change.