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True...but in the strategy tester that wouldn't work because you define the spread and then it's a static number.
If you set the spread in Strategy tester greater than the allowed max in the EA - it will not open a position at all.
I believe the issue here is that someone who doesn't understand the spread setting in Strategy Tester could set the spread very low (thinking it is pips not points).
Even if the EA tests the spread, it will always pass in Strategy Tester.
Results look great.
Now apply to a forward test and you will see major differences.
I believe the issue here is that someone who doesn't understand the spread setting in Strategy Tester could set the spread very low (thinking it is pips not points).
Even if the EA tests the spread, it will always pass in Strategy Tester.
Results look great.
Now apply to a forward test and you will see major differences.
That was the main point of this thread...to raise awareness of how the spread in the strategy tester can be misleading if not properly understood.
Sorry Christopher,
I missed your point. You're correct. The confusion between pip/point can lead to false results in strategy testing, indeed.
Properly written EAs has defined maximum allowed spread to open a position. Above that it wont open a position.
Best regards.
Spread isn't a charge like commission so I don't think the analogy of "paying" the spread is helpful for understanding what is going on.
You open a buy order at the Ask price. You close your buy order at the Bid price.
The profit shown in the terminal is constantly updating as the Bid price moves (for buy orders).
The spread could change dramatically between opening and closing your trade.