MetaTrader Tip - Expert Advisor Optimization

MetaTrader's Strategy Tester is the one to use to get the most out of your Expert Advisor. You will need to optimize and backtest your strategy using this. Forward testing in a demo account is essential but backtesting allows you to simulate trading over a long period of time in just minutes. And you can find out which settings performed best over a selected historical chart period with optimization feature.

Testing thousands of combinations of expert advisor settings to find the most profitable settings for the selected chart, period and date range is what the optimization feature of MetaTrader 4 will allow you. Indicator-based strategies will need to be optimized for maximum profitability. However, almost all EAs will benefit from optimization - even those that trade on tick data, provided you have complete M1 history data.

There is no guarantee that these settings will be profitable in the future while the optimizer will return the most profitable settings for the selected date range. It is important to regularly re-optimize your expert advisor for best results for market conditions change often.

The first thing to do is to select from the Expert Advisor drop-down box to optimize your expert advisor. Select the currency pair from the Symbol box and chart period from the Period box. For Model, you'll generally want to select "Open Prices Only," unless you are optimizing an EA that runs on tick data. In that case, select "Every Tick." Check the Use Date option and select a range of dates to optimize for. Lastly, make sure that Optimization is checked.

To open your expert advisor settings, click the Expert Properties button. Under the Inputs tab is where you'll enter the range of values to optimize for. The Start column will be the lowest value for a given setting, while the Stop column will be the highest. The Step column is the amount that the optimizer will "step through" from the Start to the Stop setting.

The optimizer will test every combination of values from 20, 40, 60 and so on up to 200. Use a start, step and stop value that is appropriate for the setting you are optimizing. Even values (5, 10, etc.) are good.

For that setting to be optimized, the checkbox to the far left must be selected. Any settings that aren't checked will use the number in the Value column when optimizing. You can adjust the Initial Deposit to something a bit more realistic Under the Testing tab. Leave the other settings at their defaults.

Hit the Start button at the bottom right of the Strategy Tester window when you're ready to begin optimizing. It can take anywhere from a few minutes to several hours depending on the period, the date range, the testing model and the number of settings to be optimized. Consider shortening the date range, optimizing fewer settings, or using a larger step value if it's taking too long.

Open the Optimization Results tab and double-click the Profit column to sort the results once the optimization is finished. Double-click any of the results to load it into the tester. To backtest with the selected settings, hit the Start button again.