stacking crypto coins

Staking Crypto Explained: Earn Passive Income

How does crypto staking work?

Instead of just keeping your cryptocurrencies in the wallets, you can earn rewards by staking these crypto coins. That’s right. After 2020, most of the crypto exchanges and wallets offer cryptocurrency staking. This is a super easy method to earn passive income from your cryptocurrencies. And this is what we show in our course about crypto staking.

Cryptocurrency staking is actually already quite popular, but there isn’t much educational content about it available. So I have decided to create this course so that everyone interested can learn how to do it with confidence. And I will demonstrate it step by step.

I have opened an account on one of the exchanges I use. I bought 3 different cryptocurrencies with a total current value above $5,000 just for this course to show you the whole process step by step.

By me saying the whole process, don’t think it is something complicated. It is a matter of just a few clicks and you do not need to have any experience in blockchain or anything related to cryptos. It really is very easy.

So let’s say you have $10,000 saved in your bank account, but instead of keeping it there, you can put that money to work and get up to 12% or even more on some of the exchanges per year. This is $1,200 without doing anything. Of course, if you have more then you could earn more. And if you have less, don’t worry, you will still earn over time because the amount will be compounding every month.

Staking demonstration

In the course, I explain what crypto staking is so you will know what you are doing. I will share with you which companies allow it and which ones I prefer to use. I will also teach you which are the safest wallets you can use to store your cryptocurrencies. And how I personally diversify the risk by keeping my crypto in different places.

Additionally, I will talk about money management and how much one should put into cryptos. Because I know many beginners that want to start investing in cryptos, are unsure which is the best asset to buy or worry that it’s too late. They wonder how much money they should invest and how long they should hold onto the asset.

I will try to answer all these questions. But what I will focus on is crypto staking because it allows you to earn extra passive income regardless of what the price of Bitcoin is or where the market goes.

I will demonstrate how to do the crypto staking right from my phone, sharing the screen of the phone with you. So if you decide to do it, you will know exactly what you need to do. I will share different strategies for crypto staking with you, which you can apply to your personal investment strategy. And it’s really great when you put your money to work for you because this way, you won’t lose the buying power of your money due to inflation. And the Crypto staking nowadays allows us to earn a respectable passive income.

What is crypto staking?

Let’s get straight to the point, what is crypto staking?

I will try to explain in simple words. Staking crypto is the process in which you will help or support the security and operations on the blockchain network and you get rewarded for that. If this still sounds complicated, we can say that staking is like locking cryptocurrencies to receive rewards.

So instead of just keeping your cryptocurrencies on the exchanges or on the wallets, you can stake them and you will earn a reward which is not bad at all.

And since 2020, and now in 2021, most of the popular cryptocurrency exchanges and wallets offer their clients to stake crypto. So these are platforms like Binance, Coinbase, Kucoin, Kraken, Poloniex, and etc.

The platform that I will use to demonstrate crypto staking in the course will be Crypto.com. And I don’t want to go into details what are the different crypto staking rewards in the different exchanges. Because they change them all the time. And if I tell you now the best conditions are on Binance, for example, next month it could be somewhere else.

When you decide if you should go for crypto staking, spend some time comparing several different crypto exchanges and crypto wallets to see which one will suit you best. And there are really many platforms and companies where you can earn interest as a reward from staking your cryptocurrencies.

The interest rates when staking crypto

So the ones that I have mentioned and most of the others work very similarly to how the banks work. So usually what happens with the banks is they get deposits and on the other side, they lend money to people who take credits.

And they get higher interest rates from the people that take loans. And give lower interest rates to the people that have deposits. So, for example, if I have a deposit in the bank, I would get, nowadays, about 1-2% maximum depending on the bank and the currency. But if I have a credit, I would be paying much more. 6-7, depends on what the interest rates are at the moment. So the exchanges and the wallets nowadays lend cryptocurrencies to the people that don’t have cryptocurrencies.

And, for example, I have cryptocurrencies, and I can lock them into my account so the exchange can lend them to other traders. And I get an interest rate out of that, the exchange gives me the majority of the interest rate and holds a portion from which they profit. The second way the exchanges and the crypto wallets work is they actually do staking on the blockchain using our cryptocurrencies. And of course, third, they can buy assets, invest in real estate just like the banks. Or they invest in stocks, it’s their business.

The thing is, when you choose your cryptocurrency exchange or wallet, you need to trust the company. Because they will be using your cryptocurrencies and you will be expecting them to pay rewards to you for that.

If you invest in something, you have to believe that you will profit out of it

And I know that many people are quite skeptical about cryptocurrencies. About staking, they start with, Oh, my account will get hacked, I will lose the money, the price will go to zero. Now, if you start with that thinking, you better not invest in cryptocurrencies.

Because if you invest in something, you have to believe that you will profit out of it. Or when we are talking about crypto staking, you need to prepare your mind that you will be having passive income from your cryptocurrencies no matter where the price is. Is it going up or is it going down? At the end of the period, you will have a passive income coming into your account.

Crypto coins Proof of Stake (PoS)

Now, I will buy some crypto coins from an exchange, I will put them in a hardware wallet and I will show you how easy it is to stake a pure Proof of Stake token.

Proof of Stake (PoS) is a mechanism used by the cryptocurrency blockchain to allow a person to mine or validate blockchain transactions depending on how many crypto coins he has. This means that the more Bitcoin or altcoin you own, the more mining power you have.

And before I show you the actual crypto staking, be sure to check our free lectures about the best crypto wallets and the top cryptocurrency exchanges to see what I use and found to be the safest. I’ll also look at the difference when you hold cryptocurrency on the exchange, on the wallet, and when you are actually staking them.

Staking crypto coins in a hardware wallet

Actually, by the time I’m writing this lecture, Algo is the easiest crypto for staking because all you need to do is to have it. And you will be getting crypto staking rewards.

Algo is the cryptocurrency of the blockchain called Algorand. The mission of this blockchain is to create an economy that is accessible for everyone with a digital currency that works fast and instantly. Like the fiat currencies but with the difference that it is digital. Algo or Algorand counts as a solution to 3 main problems of the blockchains today – decentralization, scalability, and security. The security in the Algo consensus algorithm is based on the honesty of the majority. The protocol is secured if 2/3 of the majority are honest.

And let’s get to the point, how Algo staking works? You just need to have Algo in your crypto wallet and you will be receiving staking rewards. There is no action you need to take to stake Algo, no need to delegate it to someone like with Tezos, for example.

If you want to learn how to stake Tezos on Ledger, don’t forget to have a look at our Crypto Staking course.

However, with Algo, you do not need to lock the crypto for a certain period. You just need to have Algo coins and you are already staking crypto. Even if you have 1 Algo token, which at the moment is around $1.25, you will be able to claim crypto staking rewards. And in the next lines, I will show you the whole process, step-by-step, using the Ledger Nano X hardware crypto wallet.

Purchase the crypto coins

And the first thing I will do is to buy some crypto coins. So I will open my Crypto.com mobile app and I will go to Track. There you can find all the assets that the Crypto.com exchange offers. I will scroll down and I will go to Algo.

You can see that at the moment, it sits at the price of $1.27. And actually, it did a nice break just a few hours ago. And this is one of the reasons I decided to writhe the article right now. So it broke an aggressive counter-trendline, which is my strategy for investing in the cryptocurrency market.

Algo coin price broke an aggressive counter-trendline
Algo coin price broke an aggressive counter-trendline

And at the same time, Bitcoin broke an aggressive counter-trendline, which is the signal for me when I want to buy cryptocurrencies.

Bitcoin broke an aggressive counter-trendline
Bitcoin broke an aggressive counter-trendline

And Algo reached $1.70 in February 2021, which makes me feel comfortable buying it at $1.27, $1.28. So let me buy so I will not miss the price and I will be buying 350 of Algo, which will cost me about $447 at the current moment. I will tap on Buy and I will buy with my card right now, as I want to do it instantly while I’m writing this article. This is why I will pay a 2.99% fee. Usually, I use wire transfers because this way I pay less in fees.

It takes a little while for the purchase to be confirmed and completed. And once it is completed, I will have 350 Algo coins in the Crypto.com app. If I go to Accounts, and let me see what I have in my crypto wallet, I have Crypto.com CRO coins, I have Cardano, and I have the Algorand.

And I tap on Algo, I can see details on the transaction below – at what price I have bought it, what is the fee, and what is my total cost.

And before I send the crypto to my Ledger hardware wallet, I want to show you how much you can earn from the Crypto.com app for comparison. So if I go to the Earn section in the Crypto.com app, I will see the crypto assets that I’m already staking. Bitcoin, Ethereum, CRO coin, and etc. I have total earnings of $16 since I started staking my crypto coins. And then if I go to Algo, you will see that on the 1 and 3-month term, I will earn respectively 1 and 2% annually, which is pretty low crypto staking reward. That’s why I prefer to stake my crypto on my Ledger wallet.

Install the Algo app on Ledger wallet

So the next thing I will do is to open the Ledger Live app on my phone and install the Algo app. My last transaction is the one where I showed how to stake Tezos coins on Ledger. And now I will go to Accounts and I will click on the plus button in the upper right corner, and I will tap on Add account, and then I will select Algo.

Algo app is ready, and the Ledger Live requests to “Allow Ledger Manager on your device”. Then in the app catalog, I will look for Algo again. And I will tap on Install, which will start the installation of the Algo app.

So for the people who have never used Ledger, this is a crypto wallet that is known to be one of the most secure since it is offline. It’s a hardware wallet. It’s not connected to the Internet. When I’m transferring cryptocurrencies, sending or receiving, all I need to do is to connect the Ledger with the Ledger Live app on my phone so I can do the transaction.

All the cryptocurrencies are stored in different accounts

The Algo app is already installed but if I go back to the accounts, I don’t see Algo. I will tap on the plus button and I will tap on Add account. Here I will search now for Algo and open the app of the Algorand one more time. And it says the application is ready. I will click on Continue and it says, “Accounts added successfully”. Now I have the Algorand in my accounts.

All the cryptocurrencies stored in the Ledger Live app are in different accounts. And each of the cryptocurrencies is called to be an app. First, you need to install it, and then you need to add the account.

Now I will go to Accounts. And if I scroll down, you will see on the bottom it says, Algorand 1, and I will tap on Receive and I will connect the Ledger Live with the Ledger hardware wallet again. I see the address on my Ledger Live app and on my wallet. And I just need to compare it. Usually, it’s enough to compare the first couple of letters or symbols and the last couple of letters and symbols.

And once I confirm that this is the address, I will just copy it and I will go back to Crypto.com app. And then I will go to my Algorand balance and I see that the price is already above $1.28. Hopefully, it will rise.

Withdraw crypto to Ledger wallet

Actually, they launched Algo on Coinbase Pro recently, so I guess this will help the price to gain some value. But what I will do right now, I will transfer the Algo coins to my Ledger wallet. I will tap on Withdraw because I will be sending it to external wallets. I will tap on that, Add wallet address. And right here, I will just paste the address from the Ledger wallet. It says Wallet Name, I can just call it Ledger X, for example. Pretty much that’s it. I will tap on Continue and it says, “Check your email to confirm your new wallet address.”.

And I need now to open my email where I have the confirmation from Crypto.com, I have the confirmation from my bank, and I have the withdrawal registration confirmation. And I need to confirm one more time the withdrawal address. So I tap on Confirm and it brings me back to Crypto.com. And you can see that the Ledger X address is already on the list. If I tap on Algo, and I have the option here to withdraw the amount, or I can select Max (350 Algo), and I will just tap on Withdraw. And that’s it.

You don’t need to do anything

The fee is 1 Algo and totally I will be transferring 350, so I’ll be sending 349 Algo. And I will tap on Confirm and it will take just a second. Tap anywhere to continue. So now the Algo will be gone out of my balance in Crypto.com app.

Let’s go back now to the Ledger Live app and see if we will have the Algo there immediately, usually should be almost immediately in there. I see that I have received 349 Algo.

So now if I go to Accounts and I scroll to the bottom, I will see the Algorand. I will tap on that. And if I scroll below, you will see that I don’t have any crypto staking rewards and I cannot claim rewards. But it will take a very short time. Probably by the end of this article, the crypto staking rewards will be there and I will just refresh the page a few times.

So that’s it, guys. I don’t need to do anything. I don’t need to delegate it as I did with Tezos. So I don’t need to send delegation rights to any Baker or something like that. This is for the Tezos. For the Algo, all you need to do is to have Algo in your Ledger wallet. And from there you do nothing. Actually, I already have a reward of 0.00349 of Algo.

Claiming the crypto staking rewards

And I can claim it, but it’s already added to my account. So if I tap on Claim, it says, “Congratulations, you earned 0.00349 Algo. Continue to claim your rewards.”. But below, it says, “The rewards are smaller than the estimated fees to claim them.”. Whenever I have some more crypto staking rewards, I can claim them and they will be added to my account. But now, actually, they are added to my account.

I just need to claim them but because there is some fee, I will wait. And keep in mind that approximately every 20 minutes you will receive crypto staking rewards. So staking Algo coins in Ledger is that simple. You just need to have the coins in your wallet. And you saw that I didn’t do anything, and it started adding rewards to my account. Obviously, the more coins you have, the more crypto staking rewards you will get.

By the time I’m writing this lecture, the rewards are approximately about 6% annually. This is much better compared to the 2% that I showed to you in the Crypto.com app. So it is up to you where you want to stake your crypto coins, where you feel comfortable keeping your assets, your Algo in this case.

But the best thing and the thing I like the most with the Algo coin, and that’s why I wanted to have it in my portfolio, is the fact that it is a pure Proof of Stake. You don’t need to delegate it. You don’t need to lock it for months. It’s just that simple to do it.

Staking Cryptocurrencies on Mobile Apps

I will start with the mobile apps because most of the exchanges, most of the wallets have really friendly and very easy-to-use mobile apps. And as I said, there are different wallets, there are different exchanges. I don’t want to go through all of them because next month the app could look in a different way, or their conditions, fees, or the staking itself could be totally different from what it is right now with one exchange and what it will be by the time you’re reading this lecture.

So, as I said, for the purpose of our cryptocurrency staking course, I have selected to use Crypto.com because their app is super easy to use and at the same time, they have many assets which you can use for staking. And now if I open my app for Crypto.com, you will see that what I have is the total balance on the top and right now it’s at $4,754.

My total balance

And yesterday I was recording the previous lectures from the course, my balance was $5,800 and something. So it dropped like $1,000.

But the market has been very negative today. The Bitcoin dropped below $50,000, the CRO coin yesterday reached above 27 cents and today it dropped back to 14 because they launched the official date for the main net blockchain that Crypto.com has tested and is launching next month. So that news was accepted very well by the community and the CRO coin just skyrocketed to 27 cents, and today it dropped to 13-14 at the moment.

Cryptocurrencies are volatile assests

And what I have as well, a very negative Bitcoin with 13%, Ethereum as well with 18%. So if you already have Cryptocurrencies, you will know that the balance of your account can vary a lot from day to day. And that is very normal because the Cryptocurrencies are volatile assets. And when I’m investing in Cryptocurrencies, I don’t pay attention to such ups and downs.

Of course, when I’m trading, so daily I’m buying and selling, I don’t allow myself such drawdowns. I usually take quick profits and buy on the cheaper price and then again, when there is a movement up, I sell, I buy at a cheaper price. But that’s the trading. Now, when it comes to staking, the idea is that we keep the Cryptocurrencies for a longer time. And we lock them in our accounts so we can get rewarded for it.

So it really doesn’t matter if the market will go up or it will go down in a day or two. We care that at the end of the period we have selected for the staking, we are getting a reward. So right now I will go through the Crypto.com app and most of the exchanges have very similar apps. So on the Home page, I can see my total balance. I see some favorite assets, how they’re doing, very negative today.

Some favorite assets

Crypto news

Then below, we have the top gainers. So these are the assets that gained the most during the last 24 hours. And then below we have some Crypto news.

Top gainers and Crypto news

So right now the news about Crypto.com is around the main net launching on March 25th as I’ve said. And then I have Accounts. I have my Crypto wallet, I have Exchange, and I have Crypto Earn.

Accounts

So Exchange and Crypto Earn show 0 because I didn’t do anything. I wanted to do it while I’m recording the course. And then we have Fiat Wallet which is if I have actual USD or EUR into my account. And if I click on Crypto Wallet, you will see what I have.

I click on Crypto Wallet

I have 10,000 CRO coins, I have Bitcoin 0.05, and I have Ethereum 0.5. So if I click, for example, on the Bitcoin, it’s negative today as I said, fell below 50,000.

But if I scroll down, I see the history, that I bought the Bitcoin at the price of 52,682 Bulgarian levs, which is about $32,000. So when I was preparing the course, I bought some Cryptocurrencies to have in a brand new account to show you the staking. And at that moment, the Bitcoin was at 32,000, today it’s near 50,000, yesterday it was 55,000. So I already did a profit because the Bitcoin increased its value.

Dollar Cost Average strategy

Same with the Ethereum because I bought it at the end of January as I believe, yes, 27th of January. Then in the menu down, we have this circle with the lion.

The button with the lion icon

If I click on it, you will see that there is the Crypto Wallet, Track, Fiat Wallet, Recurring Buy.

Trade section

So Recurring Buy is available on most of the exchanges and they allow you to regularly buy Cryptocurrencies.

For example, if I click on it, you will see that I have the option to invest Crypto automatically without the stress of timing the market.

I click on Recurring Buy

And this basically means that I can set it, for example, every week or every month to buy, let’s say, Bitcoin for $100. So it doesn’t matter where the price of Bitcoin goes, I can set recurring buy. So every Monday, for example, I will be buying Bitcoin for 100 EUR.

And no matter where the price goes, I will be buying every month 100 EUR, next Monday 100 EUR, and so on. And this is called Dollar Cost Average strategy, which is not a bad strategy by the way. No matter where the price goes, you are buying every week or every month. I can see the accepted Cryptocurrencies. So Crypto.com offers weekly, biweekly which means every 2 weeks, and monthly.

Earn option

And you can have maximum 5 active recurring purchases, the minimum amount is $50 for each purchase. And then we have spent the option if you want to pay, Crypto.com offers different Visa cards. Depends on how much you have into your portfolio, how much you’re staking. And then in Finance, we have the Supercharger and we have the Earn option.

And exactly the Earn option is where we will be staking and I will show you that in the next lectures.

I click on the Earn option

So as you can see, on the top, it says ‘Earn up to 12% annually on your Crypto assets’. I will show you the different assets, different time periods, what’s the difference so you can have an idea of what you are doing before actual Crypto staking. And I will show you step by step how you can do it from this app of Crypto.com and as I said, most of the apps work in a very similar way. They look very similar.

And most of the exchanges and wallets have a desktop app as well so you can do it from your computer. Now, personally, when I do trading, technical analysis, and I draw some patterns, lines, I always do it from the computer. But I often buy and sell Cryptocurrency from my phone. If I am out, if I see the price at which I am ready to buy, I can do it immediately from the phone, from the street, from the restaurant, wherever I am.

Have both desktop and app versions

I would suggest you have both, have a desktop version where I actually follow the prices and I see clearly the chart and I have as well the apps from the different Cryptocurrency exchanges that I use. So if I want to do it at any moment and I am not in front of the computer, I can do that easily. So let’s get into the staking itself and I will show you the different options that we have.

Now I will explain what are the different time periods and what you need to keep in mind before you decide for how long you want to stake your Cryptocurrency. So if I open the Crypto.com app again and I click on the lion icon and then I tap on Finance Earn, I will get to the staking section. And we have 3 options; we have staking for a 3-month term, we have a 1-month term, and we have the Flexible option.

The flexible option

So with the Flexible option, we have access to our Cryptocurrency all the time, but we have lower rates. So, for example, I will have 2% on the CRO coin, I will have 2% on Bitcoin, and I will have 3.5% on the Ethereum.

The Flexible option

If I increase it to 1 Month Term, you will see that for the CRO coin I have 4%, for Bitcoin I have 4.5%, and for Ethereum I have 4.5%.

The 1 Month Term option

And then if I take the maximum of 3 Month Term, I will have 6% for CRO coin, 6.5% for Bitcoin, and 5.5% for Ethereum.

The 3 Month Term option

And keep in mind that this percentage is on a yearly basis. So it is a personal choice how much time you want to be staking your Cryptocurrencies. An interesting strategy that I’ve been using and I will demonstrate a little bit later is that you can select different periods for the different assets you have. So this way, you will have constant access to some of your Cryptocurrencies.

Staking period

As well, if you have, for example, only Bitcoin in your account, let’s say you have 3 Bitcoins in your account, you can set 1 coin for 1 month, another coin for 3 months, and the third coin for flexible options so you’ll have access to your 1 Bitcoin at any moment if you want to purchase something or if you want to sell it, if you want to exchange it. Or if you want to use the 3-month term for all of them, you can start on a different date.

For example, if you start at the beginning of January, let’s say, and you select the 3-month option, you will be staking it January, February, and March. The second Bitcoin, you can start in February. So you will be staking in February, March, and April. And the third one, you can start in March. So it will be March, April, and May.

Every month, 1 staking period will be over and you will have access to your 1 Bitcoin and then you will decide if you want to start a new staking period or if you want to sell it, exchange it, or whatever you want to do with your Cryptocurrency. So you don’t necessarily need to put all of your Crypto for 1 period and wait for 3 months and have no access to any of your Cryptocurrencies for 3 months.

Setting stakes

So think about how you will feel comfortable and if you feel OK if you lock all of your Cryptos for 3 months. Because the market could turn very negative and you want to sell it but you cannot because you’re staking it, then you’d better go for the flexible option which will be more suitable in this case for you. But if you are the kind of person that says, ‘Alright, I don’t care where the Bitcoin will be in 3 months time.

I want to get some reward of having it into my wallet or my exchange. I will set it for 3 months and in 3 months time I will get the rewards from the staking and then I will see what I will do.’ But again, if you want to take the maximum periods, I would suggest you divide your Cryptocurrencies and start on different date.So all the time, one staking period will be over, another one will start, another one will be over, another one will start.

Then you will have access constantly to your Cryptocurrencies. So before I show you step by step how to set up the staking, I will explain what is the difference if you are staking Cryptocurrencies such as the Bitcoin, the Ethereum, the other volatile assets, and if you are staking the USD coin which is pegged to the American dollar.

The main difference

So what is the difference if you want to stake the USD coin or if you want to stake Bitcoin, Ethereum, CRO coin, or any other volatile coin? The difference is that with the USD coin, we have the highest percentage. If I scroll down, you will see that on Crypto.com, for the moment, I have 12% annually staking the USD coin, which is ERC 20 coin and it’s a much higher percentage compared to the rest.

The USD coin annual staking

As well, I have with the Tether which is again back to the American dollar. But the main difference for me is not that much the percentage you get as a reward at the end of the staking period, but the fact that the USD coin is pegged to the American dollar. So it doesn’t matter where the Bitcoin goes, is it going up? Is the market bullish? Is the market bearish? At the end of your staking period, you will have your same USD coins, the same value, but you will have a bigger reward.

In other words, you are not taking the risk that in 3 months time your Cryptocurrency value will be lower or it will be higher. So, for example, if I stake Bitcoin right now, and in 3 months time I don’t know where it will be, it could be much lower than the 50,000 where it is right now, but it could be 100,000. We don’t know that. But if it is the USD coin in 3 months time, it will be a very similar value to what I have right now because it is pegged to the American dollar.

USD coin suitability

So the value of the USD coin will be the same as the value of the American dollar at that time. So it’s a stable coin, it’s backed by the US bank and some huge companies. I guess USD coin’s more suitable for the people that are not huge believers of the Cryptocurrencies and they have some saved money. Let’s say you have $100,000 saved and instead of just keeping them, you can put them to work for you. You can buy USD coins from Crypto.com or any other exchange. And at the end of the year, you’ll have 12%, which will be $1,200, not bad.

That’s $1,000 a month without doing anything. And I really don’t like to say without doing anything because obviously you did something to earn that much money. Luckily, with staking, there’s a chance to get much more at the end of the year. Or at the end of the 3 month period compared to what the bank will give you. And something important here, when you look at the percentages, some might think that this is for the lockup period, for example, for the 3-month term. No, it’s annual. So if you decide to stake, for example, the USD coin 12%, this isn’t for the 3 months.

If you are staking $100,000, you’re not getting $12,000 after 3 months but after 1 year. After 3 months, you’re getting 3%. Which makes it 1% a month. So all of the percentages you see on the app are annual. And this is something you need to bear in mind before you decide for how long you want to stake the Cryptocurrencies. Which Cryptocurrencies you want to stake, and how you want to manage your account. And I’ll share with you what’s my strategy when I’m staking Cryptocurrencies.

Staking Cryptocurrency on Crypto.com app

I will now show you how you can stake your Cryptocurrency on the Crypto.com app that I have selected for the purpose of the course and you will see how you can earn income from your Cryptocurrencies. So if I open the app and I tap on the lion roundish icon in the bottom and then I tap on Earn in Finance, I will get to the Earn section where I have the option to select different period of time. And below I can select the asset I want to stake.

So on the top, I have 2 options; With 50,000 or more CRO stake or With 5,000 or less CRO stake.

The 2 options

So no matter which one I select, the CRO coin staking does not change. At the moment it is fixed to 6%. But if I change, one more time, for the Bitcoin and the Ethereum, the percentage lowers. So as I said, for the purpose of this course, I have opened a brand new account, bought some Cryptocurrencies, CRO coin, Bitcoin, and Ethereum to show you how it works.

And I didn’t stake any Cryptocurrency with this account. So simply I will show how I would do it if I were you. This means that I need to stick to with 5,000 or less CRO stake. So let me start with the Crypto.com coin, and for 3 months I have 6%. Let me lower it to 1 month, it drops to 4%. And if I change to Flexible, it will decrease to 2%.

The CRO coin

So for the CRO coin, I will definitely go for the 3-month term. I am OK to keep CRO coin for a longer period of time. And then I will just click on Start Earning Now and I will select the CRO coin. I will select right here 3 months and I will click on Continue.

I select the 3 Month Term option

Then here are the terms and conditions which I would suggest you have a look at.

The terms and conditions

But right now I will just click on all of them and I will tap on Continue.

I have the warning that the asset will be held for 3 months. And will be available again on May 24th, 2021. And I have the option to select how many of my CRO coins I want to stake. It gives me 5,000 by default but I have 10,000 in the account. So I will take all of it and I will tap on Deposit.

I deposit 10,000 CRO

So it’s depositing from my CRO Wallet and I see the summary. Confirm, and it needs my passcode.

You deposited 10,000 CRO. Tap anywhere to continue. It’s loading but I am referred to the Crypto Earn section where I have my total earnings, 0. Because as I said, I opened a brand new account for the purpose of the course. So you see that my balance is there and my Crypto Wallet is just Bitcoin and Ethereum right now.

Accounts

And my CRO coin moved to Crypto Earn.

Difference between clicking on the lion and clicking on the Earn

So it’s not anymore into my Crypto Wallet. And now I want to show you the difference that if I click on the lion and I click on the Earn. It brings me to my Crypto Earn section and not the page where I was before. Now I need to tap on the + button.

Tap on the + button

So I will be selecting more Cryptocurrencies for staking and then I will click on Bitcoin. And now I have again the option to choose. Thus I will go again for the 3-month period, I click on Continue.

I will accept the terms and conditions. Then I tap on Continue. And now I will select to use all of the Bitcoin that I have into my account, 0.05, I will deposit it.

I deposit 0.05 BTC

So on the 24th of May, again, the staking period will be over. And I confirm it, it requires the passcode. I have deposited the Bitcoin as well. So let me show you very quickly again for the Ethereum where I will select just a shorter period for the purpose of this lecture.

I will tap on the plus, Ethereum. And here I will go for the 1 Month Term.

I select the 1 Month Term option

So we can see at the end what will be the difference between staking 1 month or 3 months. I will hit on Continue. I will accept all of the terms and conditions, Continue. And I have half Ethereum right over here,

I deposit 0.5 ETH

and I hit on Deposit and I will simply confirm it. The passcode is required again and I enter it.

Preferability in staking in different periods of time

I deposit as well the Ethereum. Tap anywhere to continue. And all of my Cryptocurrency now is into the Earn section and not anymore into my Wallet. So I don’t usually do it that way. I just wanted to show it in one lecture. I would prefer to start my staking in different periods of time. So all the time I will have access to some of my Crypto and not having it blocked for 3 months.

But that account with this Crypto, I have bought it just for the purpose of the course. And I wanted to show you how you can select different Cryptocurrencies. For different periods of time so you can see what is the difference. So leave now the Cryptocurrency staking and it is that simple, actually, to do it.

Conclusion

Thank you very much for reading this lecture. I hope you have understood how you can buy cryptocurrencies, send them to a crypto wallet, and then start receiving rewards from staking them. And the easiest way for the moment is Algo indeed when we are talking about the type of cryptocurrencies.

But always make sure to check out the different crypto exchanges, the different wallets, what percentages they offer for rewards. For me personally, anything above 4-5% annually is good enough to have my cryptocurrency staking. And I prefer Algo in this case because I’m not locking it, just what I showed already in Crypto.com. But all I need to do is just to keep it in my wallet.

And as you saw, for example, with the Bitcoin and Ethereum, I had to lock it in the Earn section on Crypto.com. But because Bitcoin and Ethereum are Proof of Work and not Proof of Stake coins, I cannot stake them on the Ledger or on the other wallets. So I use the Earn option on Crypto.com. Thank you for reading and I will see you in the next lecture.

best crypto wallets

Best Crypto Wallet in 2021

Today I will talk about security when we invest in cryptocurrencies and I will share with you which are the 3 best crypto wallets that we use.

So I guess you already know that keeping your coins on a crypto exchange is not the best option because it is less secure than the wallet.

We use the exchanges to Buy, Sell and exchange cryptocurrencies, but you should not trust the exchange to keep your crypto coins safe. So once you select your cryptocurrency exchange and you buy your Bitcoin or other cryptos you need to make sure that you keep them safe on a crypto wallet.

Coinbase Has One OF The Best Crypto Wallet Apps

The first crypto wallet that I use and probably has one of the best apps, is the Coinbase wallet.

As you already may know, Coinbase is one of the largest cryptocurrency companies in the world. They are best known for their Coinbase exchange, but they also have a wallet. It connects to the Coinbase exchange and it is super easy for me to transfer cryptocurrencies from the exchange to the wallet. I do not need to copy-paste addresses. When I am in the Coinbase wallet I can choose to transfer the coins from the exchange easily.

Many people trust Coinbase wallet because Coinbase has many regulations and licenses. Also, the USD wallets of US clients have insurance protection by the Federal Deposit Insurance Corporation, up to $250 000 dollars. 

Coinbase wallet will be really comfortable for you if you are using the Coinbase exchange as well. Why? Because you can connect the two easily and transfer coins quickly without using addresses or any extra tags. However, you can use the Coinbase wallet to send and receive coins from friends or send to other wallets of course.

Software wallet is not as secure as a hardware wallet

Keep in mind that the Coinbase wallet is a software wallet, and it is not as secure as a hardware wallet like the Ledger, for example. However, Coinbase has one of the safest web wallets you can use. They store 99% of their assets in cold offline storage that can’t be accessed. 

Coinbase wallet has one of the best crypto wallet mobile apps and is super easy to get started with, even if you are a complete beginner. The downside is that if you need support. Coinbase is known to have one of the slowest support responses compared to other cryptocurrency wallets. But as I said it is very easy to use the Coinbase wallet so you might never need support.

Exodus Can Be Used On A Mobile Device

The second option that I’ve been using quite a lot recently is the Exodus crypto wallet. This is a free software wallet that I use from my phone, but it could be used on a desktop. That is a great advantage in comparison with many other software wallets.

Exodus is a non-custodial wallet.

This means that you have private key access and you are in control of your coins.

Exodus gives you the option to back up your wallet with a 12-word phrase. This means that you can always rebuild your wallet on a new computer or if you lose your phone. That is why keeping your secure phrase offline is important. A piece of paper would work best and do not share it with anyone because if someone has your phrase, they can access your wallet from another device.

Another great feature with Exodus is that you can trade cryptocurrencies within the wallet and it supports over 100 coins. That I find is enough for me personally. This is useful when you want to buy some coins and simultaneously sell others. For example, couple of days ago, I wanted to sell Stellar and Buy Ripple. And I calculated that the fees I will pay on Coinbase to sell the Stellar, get Euros in my wallet, and buy Ripple with these euros would cost me 25% more in fees compared to exchanging Stellar to Ripple straight away. And I did it easily on the Exodus crypto wallet.  

Ledger – The Best Crypto Hardware Wallet

The third crypto wallet I use is Ledger. This hardware wallet is among the best and most secure wallets on the market.

The first important thing to note is that the Ledger is a hardware wallet, and that is a very secure method to keep your coins safe because it is offline, and no one else except you has access to it.

Having your crypto coins offline keeps them safe from hackers.

The most popular model so far was the Ledger Nano S, and in 2020 they launched the new Ledger Nano X crypto wallet. When it comes to security, both are safe. They have a PIN code, and they have a 24 words recovery phrase as a backup.

Yes, it is a bit more expensive than the other crypto hardware wallet options, but if you have thousands of dollars in cryptocurrencies, I guess you would be likely to spend $150 for keeping them safe, wouldn’t you?

What are some of the major differences between the Ledger models?

The newer Nano X has Bluetooth compatibility with the Ledger Live Mobile. It has a bigger screen, and its battery can last up to 8 hours in standby mode. However, the size is slightly larger, and it is slightly heavier than the Nano S. 

But, the main reason why I prefer the new Nano X, is because it allows up to 100 apps installed on the device, and the Nano S only allows up to 20. And for iPhone users, you can manage your assets with the Ledger app using your iPhone, while the Ledger Nano S only works with an android app. So, if you are using Android and holding a few different coins, then the Ledger Nano S might be suitable for you, and you can select the cheaper version.

Lastly, once you purchase either of the two, you will receive consecutive emails with instructional videos on how to use it that will assist you in getting started, and in addition, they have good support that will answer your questions and emails.

Risk Diversification

And for the moment, I haven’t found any issues using these 3 crypto wallets, but I don’t want to keep all my coins in one wallet. I prefer to diversify the risk by not keeping all of my eggs in 1 basket.

For example, I keep the coins that I Buy and forget in the Ledger, and the ones that I Buy and Sell every few weeks I keep in the Coinbase and in the Exodus wallets.

The Bottom Line

I hope this short lecture will help you in selecting the best crypto wallet. If you want to use the 3 of them together, that is even better.

If you have questions about the crypto wallets, drop them in the comments below. Thank you for reading and I will see you in another lecture.

where to buy crypto

Where To Buy Bitcoin, Ethreum, or Another Crypto

In this lecture, I will talk about the different options that you have or the different methods you can use to buy your first Bitcoin, Ethereum, or another cryptocurrency. Moreover, I will show you what are the major differences when you crypto from a crypto exchange and when you buy it from a broker.

Now, in 2021, when I’m recording the Bitcoin for Beginners: Cryptocurrency Investment Course there are already so many websites, there are so many crypto exchanges and brokers offering cryptocurrencies. We have a huge choice of where to buy crypto. But at the same time, people get frustrated.

Where do I start when there are so many places to buy crypto? What’s the difference? What are the PROs, the CONs?

This is why I decided to record the course – to make it easier and to give you a few different options that you can choose from where to buy Bitcoin, Ethereum, or another crypto? Options that I have tested and I know they are trusty.

The crypto exchanges

So let’s start from what are the different methods to get your first Bitcoins or another cryptocurrency.

Now, the most popular way is the cryptocurrency exchanges and there are 2 types of exchanges.

The first is where you can exchange one cryptocurrency for another.

So let’s say I have Ethereum. You have Bitcoin. We meet on the exchange and we exchange them. On the price that we agreed or the price that is currently on the market.

exchange is the place from where to buy or exchange crypto
The first type of exchanges allows to exchange cryptocurrencies

But on these exchanges, let’s say I have a thousand US dollars in my bank account and I want to purchase Bitcoin, I cannot do it there. In other words, I cannot pay with fiat currencies. The fiat currencies are the EUR, the USD, the GBP, the Swiss franc and etc. Basically, most of the currencies that we use in our daily life.

So if you want to actually buy Bitcoin or another crypto, you need to go for the second type of exchange from where you can actually buy Bitcoin, Ethereum, or another crypto with cash, with your debit or credit card, or with a wire transfer.

There are different payment methods with the different crypto exchanges, but there are actually exchanges where you can purchase Bitcoin and Cryptocurrencies.

How to purchase Bitcoin on Coinbase?

The first exchange that I will draw to your attention is the exchange that I started with, and this is Coinbase. Coinbase is a licensed and regulated exchange in the United States. I have never had issues with it.

Coinbase is one of the places from where to buy crypto
Coinbase exchange

And at the same time, they have a wallet and it’s very easy to transfer coins between the exchange and the wallet. But about the wallet, I will talk in detail in the course.

So for example, on Coinbase, with my type of account, I can buy Bitcoin for maximum 7,500 EUR. Which if I click on Preview Buy,

I click on Preview Buy

you will see that the Coinbase fee for that transaction will be 287 EUR which is much more compared to 25 USD.

The order preview

And this is for 7,500 EUR, which is actually less than half Bitcoin. So if I’m buying a complete Bitcoin on an exchange like Coinbase, I will be paying more than 560 – 570 EUR for that transaction. After that, when I’m selling it or exchanging it for other cryptos, there will be more fees, obviously.

The Huobi Exchange is another place from where to buy Bitcoin

The second exchange that I have used is the Huobi, and as far as I remember, it was located in China.

The Huoby exchange is another place from where to buy Bitcoin, Ethereum or another crypto
The Huobi Exchange

But still, I’m in Bulgaria and I succeeded to buy Bitcoin from there without any issues.

I have used as well, Coinmama, where I have bought some more cryptocurrencies.

Coinmama exchange

Purchase cryptocurrency from Crypto.com

And as well, I have used Crypto.com as it has a very nice and friendly mobile app.

Crypto.com

Actually, most of the exchanges and websites where they sell cryptocurrencies, have already friendly mobile apps. So personally, I do most of the crypto investing from the phone, which makes it very easy. No matter I’m at home, in the office, or outside, no matter what I’m doing if I see the price at which I want to buy crypto, I can easily do that from the phone.

So these are 4 different exchanges that I have used and I had no problems when buying Bitcoin, Ethereum, or another cryptocurrency. And now in 2021 when I’m recording the course it’s much easier because we already have a lot of reviews over the Internet.

We know which are the trusty and reliable exchanges. Back in 2015, 2016, even 2017, it was a little bit shady because there were so many scam websites, and exchanges, and brokers, and still there are such websites.

But as I said, we have a lot of feedback over the Internet, so make sure you always check the exchange, look for reviews from other people.

Directions to guide how to purchase Bitcoins or another crypto

I’m lucky because I do online courses and I have over 30,000 students joining my courses by the time I’m recording this course and many give me feedback and they complain as well when they are not happy with some broker or some exchange.

So I have like the bigger picture, which are the reliable places from where I personally can buy Bitcoin or Ethereum, or I can suggest to other students that have no idea where to start.

But please don’t take as a recommendation any of the exchanges. I’m not recommending any website. What I want to do is just to make it easier for you and you will know from where to start.

Buy cryptocurrency from a Broker

Now, the second option that we have to buy Bitcoin or other crypto coins is the brokers. Brokers are huge companies that originally started with Forex trading.

I started trading with brokers, which was long ago before the cryptocurrencies got popular, but the brokers started offering cryptocurrencies as well. But there was a huge difference between the exchanges and the brokers.

So with the exchange, we actually purchase Bitcoin, Ethereum, or other crypto coins. They send them to us, we can keep them in the wallet. And from there you can pay online. You can keep it as an investment or you can just want to put some money aside with cryptocurrencies.

The brokers don’t offer you real cryptocurrencies. How it works with the brokers is you open an account and you start trading with that account. For example, I open an account with $5,000 with a broker. I can buy and sell Bitcoin, Ethereum, or another crypto, but I don’t own actual cryptocurrency. It’s called CFD trading, which stands for Contract for Difference.

CFT Trading image
CFD stands for Contract For Difference

For example, let’s see an example with Hot Forex broker and the MetaTrader platform. Once you’re logged in to your trading account, you can see the Market Watch where we have the Bid and the Ask price changing all the time. This means that we are connected to the server of the broker and we have access to the market.

The Market Watch

No matter if you are using a Demo Account, you can still participate in the market and practice. And that’s the best thing actually in having a Demo Account because you are actually trading, of course, without having any real profits in the account or any losses.

But that’s the idea of practicing with a Demo Account. Now, on the left side, you will notice the Market Watch where we have different assets.

Bitcoin is the most volatile asset

We have the currency pairs on the top with Hot Forex broker and then we have gold, some indexes, oil, other commodities. Then there are some stocks. And if I scroll down, you will see the cryptocurrencies.

We have Bitcoin versus the USD, which is obviously the most popular asset that everyone trades. Then we have Bitcoin versus the EUR, Ethereum versus the USD, Ethereum versus the EUR, Litecoin EUR Litecoin USD and we have the Ripple as well.

OK, honestly, I haven’t seen much more of a difference with other brokers when it comes to the variety of assets for CFD trading. In one of my highly rated courses, I’m focusing on Bitcoin and I trade personally Bitcoin with Robots because it’s the most volatile asset and this is where we can maximize the profits when we are trading volatile assets. And Bitcoin versus the USD is definitely one of the most volatile assets.

The Bid price and the Ask price

Now we have 2 columns. 1 is the Bid price and the other one is the Ask price.

Keep in mind that when you buy a trading asset, you always buy at the Ask price, which is the more expensive price. When you sell it, you sell on the Bid price.

Hence, when you buy Bitcoin and then you close the position, you will be buying it at the Ask price, and then when you close the position since this is a Sell order, you will be closing it on the Bid price.

If you want to see exactly how much is the difference between the Bid and the Ask price, you can right-click over the Market Watch and check Spread.

Check Spread

This will show a 3rd column and this is exactly the spread.

The spread column

With most of the brokers, the spread is floating, which means it’s changing whenever there is volatility.

At this moment with the Bitcoin, it’s about $24. And something important to notice is that this broker has 3 digits after the decimal comma for the Bitcoin. The Ask price is $18,077.045. There are 3 digits after the decimal comma.

So this means that the spread, which is displayed as 24 000 something, is actually $24. So if I buy 1 complete lot and I close the position. Or I sell 1 complete lot and I close the position, I will pay about $24 as spread.

It looks much more compared to the others. But keep in mind, Bitcoin is the most expensive asset right here. And at the same time, if you are buying Bitcoin on Coinbase or on any other cryptocurrency exchange, you are still paying a fee.

Paying the Swap fees at the broker

Many people say that it’s more expensive to trade with a broker compared to the exchanges but that’s not actually the reality. And it might get more expensive if you are holding your position for a long time. Because when trading with Forex brokers like Hot Forex or any other, we pay as well swap.

If I go to specification,

I click on Specification

you will see that I have a negative of 6 000 points, which is I think 6 USD in this case of a swap because we have 3 digits.

BTCUSD contract specification

So this is about 6 USD fee if we hold the position overnight. So the brokers will charge us a swap when they transfer the trade for the next day. And we don’t have that on the exchanges. When we buy cryptos, we don’t pay a fee that we are holding it in the account.

So only in the case when you hold the trades for a long, long time on your MetaTrader account or on your broker’s account, it might get more expensive to trade the Bitcoin here because you will be paying swap every night.

The swap

But, because we are trading with Robots we close the trades quickly, some of the trades will not last over the night. The Robots that I included in the course will not last through the weekend.

Don’t forget the Spread

OK, so we have 3 days swap as well with the brokers, which means that if we have a trade opened on Friday or we have an open trade during Friday and it goes through Saturday, Sunday, and Monday, the market opens again, then we will pay swap for these 3 days. 3-day swap that is charged on Fridays. This is how the trading works. And on the exchanges, we don’t have such costs. Such a swap.

But one more time, as you saw, Coinbase fee is much more expensive compared to the spread that we have with Hot Forex in this example.

And back in time in 2017, 2018, when everybody was crazy about the Bitcoin and the brokers just placed the Bitcoin on their platforms, the spread was absolutely crazy. It was reaching about 200, 300 USD.

At that moment, I didn’t use Hot Forex. I found it later as a reliable broker. So I don’t know what was their spread during this time. But now with most of the brokers, the spread is somewhere between 15, 20, 25, 30 USD, which is just fine compared one more time to what we have on the exchanges.

Using MetaTrader in algorithmic trading

OK, so that’s why I said that the exchanges are more suitable if you buy cryptocurrencies and you hold them for a long time for investment purposes. This is what I’m showing in my Cryptocurrency Investment Strategy course where I analyze Bitcoin, for example, on TradingView. That is another platform for trading, very popular, especially for technical analysis like what you see below.

Trading View platform

But in that course, I teach the investors how to buy cryptocurrencies and when exactly to buy, when exactly to Take Profits, and to Sell the cryptocurrencies. But that’s different. That’s an investment. And this is why there I demonstrated over Coinbase and personally I use this system in Coinbase.

But when it comes to algorithmic trading, trading with Robots, MetaTrader is much more suitable with the broker as Hot Forex because there we have a much lower fee or in trading, this is called Spread. And if we are closing the trades within the same day or within a few days, we don’t pay a huge Swap, which is just fine.

The gaps between Friday and Monday

And why did I say that the trades don’t last over the weekend with the Robots that I include in the course?

This is because of the Forex brokers, usually, we don’t have trading on the weekend and you can see this gap over here. There is no price between these 2 levels.

The gap

So if I go to Properties and I go to Common and I uncheck Show grid, but if I check Show period separators and I click on OK,

I click on OK

you will see that this is exactly between Friday and Monday.

Let me go to the current price. I can go as well with the End button on my keyboard. Or if I press this button on top that says Scroll the chart to the end on tick incoming and zoom it,

I press the Scroll the chart to the end on tick incoming button

you will see that today it is the 10th of December, which is Thursday. We have Wednesday, Tuesday, Monday. It was 7th of December 2020. Then the next day is 4th of December, which was Friday. And then we have Thursday, Wednesday, Tuesday, Monday, which was the 30th of November 2020. And the next day is 27th of November 2020.

This is the weekend. This is Friday and here starts Monday. So we don’t have trading over the weekend with most of the Forex brokers for cryptocurrencies.

There is no trading over the weekend

And this is why the Expert Advisors that I included in this course will not hold positions over the weekend. Everything will be closed until Friday. And this way, you don’t worry if there are such gaps.

This is one of the things that I have improved compared to the EAs from the previous course, because before there were brokers offering trading during the weekend and this were the type of EAs I was using.

And then when I shared the EAs in my course, some of the students complained that their broker doesn’t have cryptocurrency trading during the weekend. So no worries about that anymore. You will not see trades opened during the weekend.

The difference between crypto exchanges and the brokers

So with the broker, every time when you buy crypto, let’s say you buy the Bitcoin at $20,000 and sell it at $30,000, you will benefit from this difference of $10,000 and it will go into your account as a profit. On the other side, if you buy crypto, let’s say at $40,000 and the price drops to $30,000 (something that happened at the end of January 2021 when Bitcoin fell by over 20% for 1 day) you will lose this difference of $10,000.

This is how the process of purchasing cryptocurrency works with the brokers. But you don’t have actual crypto coins in your account. You have a trading account that you use. You can benefit but you can lose too.

But at the end of the day, you have the money into your account that you can withdraw. But you don’t have any Bitcoin, Ethereum, or another cryptocurrency that you can send to your crypto wallet.

So that’s the major difference between the exchanges and the brokers.

How to purchase Bitcoins using an ATM terminal

The third option from where to buy Bitcoin, Ethereum, or another crypto is the ATM terminals. They are very popular in some countries, but in others not.

Purchase Bitcoins or Ethereum from ATM terminal
Bitcoin ATM terminals

For example, in Bulgaria we have, I think, about 3-4 such terminals. I’ve never used them because as far as I know, they have huge commissions over there.

But it’s an actual ATM terminal where you can go and purchase some Bitcoins or other coins depends what they offer.

And it really depends on the region you live in and what are the restrictions in your country. Some countries are very friendly to Bitcoin and cryptocurrencies. Others are blocking them. In Bulgaria where I live it is somewhere in the middle. It was very hard to purchase actual Bitcoins back in 2017.

That’s why I use the brokers and the trading accounts to trade the Bitcoin, but I don’t actually buy it. Nowadays it is much easier to find a place from where to buy a cryptocurrency. Even though some banks are still blocking my accounts and I still have hard times to exchange and buy cryptocurrencies with some banks. But it is possible, it is much easier than it used to be.

From where to buy your first cryptocurrency

So these are the main 3 options you have when deciding from where to buy your first crypto coins.

And if you do it really for the first time and you don’t know how to trade – you have no experience of reading charts, you have no trading strategy to follow and just want to buy some Bitcoin to have it in your portfolio – I would suggest you go with some famous and regulated cryptocurrency exchange. That’s the easiest way.

You can download their mobile app on your phone or you can use a web platform to purchase. As I’ve said, most of them have very user-friendly with mobile apps. And I guess most people nowadays use their smartphones to buy cryptocurrencies from the exchanges.

But make sure one more time to read reviews to make sure you are on a trusted website and that you will be actually able to withdraw your coins or to withdraw your money after that.

When you decide to sell your coins and you make some profits, that’s very important at the end of the day to have your money back into your bank account. That’s the most important thing.

Withdrawing money from Coinbase
Withdrawing your money

Even if you make a profit but you are not able to withdraw your coins, it will be a waste of time and unfortunately a waste of money.

So be very careful when you select the exchange. And what I always suggest is to just try it out first. For example, buy something small, let’s say $20, $50, just purchase some Bitcoins. Wait a little bit for the Bitcoin to go on a profit. Sell it or just buy and sell crypto immediately. Then withdraw your money to your account.

So you see actually the SMS or the notification, or you go to your online banking and you check that the money is into your account. Then you can say, OK, I tested it, it’s trusty, I can go for bigger investments.

The bottom line

That’s the right way to decide from where to buy cryptocurrencies. But don’t jump with $5,000 on a website that you don’t know and you haven’t checked, because you might never see your money, unfortunately.

There are always scam websites in every business, not just with cryptocurrency. So stay away from them. And one more time, the best thing would be just to try it out with a small amount of crypto or a small amount of money.

Thank you for reading. If you have found this lecture useful, I would really appreciate it if you leave a comment below. I will see you in the next lecture.

backtest Expert Advisor on MetaTrader 4

Backtest MetaTrader 4 vs Strategy Builder EA Studio

Backtesting in MetaTrader 4

In this lecture, I will show you how to perform a backtest on MetaTrader 4 and what’s the difference with backtesting in EA Studio.

In another lecture, I showed you how to backtest a trading strategy with the EA Studio where we have a lot of tools and statistics for each of the strategies. From there, we can change the strategy in many ways if we want to.

But in MetaTrader 4 we have the option to make a backtest or to see how the strategy performs until the current moment.

And especially if you’re just starting with a new broker and you have just installed MetaTrader 4 platform, it’s not a bad idea to make a backtest for the strategy. So you will know if you have the right trading environment or if your broker is suitable for the strategies that you will be trading with.

So no matter for which instrument I will do it and for which strategy. Let’s start with the first strategy for the Bitcoin on M15 from our Top 5 Strategies (+EAs) for Cryptocurrency Algorithmic Trading course.

And before I do the MetaTrader 4 backtest, I will show you something important. If you have just installed the MetaTrader 4 for first time, you need to load more bars from your broker. For this purpose, you will need to zoom out the chart and then press the Home key on your keyboard.

loading more bars to perform a backtest on MetaTrader 4
Press the Home key on your keyboard

I see it moved a little bit the chart and I have the data now starting from the 8th of May 2020, which is not a lot of data, but that’s the maximum that Pepperstone offers.

The data for MetaTrader 4 backtesting on the broker’s server

And I have more data, but it’s on the other server because they had a few servers on Pepperstone, and they changed now to a new one for the Demo Accounts and I had more data previously, but now it’s not in there.

For example, if I go to H1, zoom out and press the Home key again, let me see where it will go. Just press and hold it so it will go to the beginning, on the 24th of April 2020.

So on that server, they don’t have a lot of data, but I’m just taking the maximum possible. So if I go back to the M15 chart and I will start with the RSI strategy, what I can do is right-click over the chart and I go to Expert Advisors Strategy Tester or you can simply press F6 on your keyboard.

click on Strategy Tester to start backtesting on MetaTrader 4
I click on Strategy Tester

And you will notice a new window showing below your Terminal.

the terminal in MT4
A new window appears below the Terminal

What happens when you uncheck Use date?

Now from here, you have a few options to select the symbol, the Expert Advisor that you will be using. Usually, these load automatically if you do it from the chart because the Expert Advisor is attached to the chart. And then we have a Model where we have 3 options: Every tick, Control points, and Open prices only.

the model for the backtest in MetaTrader 4
The Model in MetaTrader 4

For the strategies that we exported with EA Studio and for the strategies that open new trades on the opening of the new bar, you need to select Open prices only, which is, by the way, the most reliable method to backtest Expert Advisors on MetaTrader 4.

I click on it and then on the right side we have the period which is set automatically to M15 and then we have Spread. We can test it with the current spread or you can enter any value if you want to. Now, before I click on START, we have the option to use date so you can select the time period.

For example, you can perform a MetaTrader 4 backtest for the last 1 year or for the last 2 years up to date. It depends on the period you want to test the Expert Advisors.

And if you uncheck use date, then you will be using the whole period that you have on the chart.

And I click on START and you will see the MetaTrader 4 backtest is very quick. I go to results. Here are the results from the backtest of the Expert Advisor on MetaTrader 4.

metatrader 4 backtesting results
The Results from the backtest in MetaTrader 4

And then we have the graph.

the graph of the backtest
The Graph of the strategy

As you see, it goes up on profit, but we have just 24 trades that happen, which is not really a lot. Not enough to see the performance of the Expert Advisor.

Importance of Historical Data for MetaTrader 4 Backtest

And then we have the report where we see some more statistics that are available.

the backtest report in metatrader 4
The backtest Report in MetaTrader 4

Now, if I open the very same strategy on EA Studio, you will see that I have 418 Count of trades. There’s the balance chart for the last 3 years and 6-7 months, which is more data. And this is because I have the data, as I’ve said from the previous server.

the editor in Expert Advisor Studio
The Editor in EA Studio

And if you want to collect more data from your broker, all you need to do is to keep your MetaTrader 4 platform open and with time, it will collect more bars for you.

Basically, this is the only reliable way you can collect bars from the MetaTrader 4 and perform a good backtest. Now, there is historical data. If you go to Tools and you go to History Center. From here, you can download more data.

History Center in MetaTrader 4
Click on History Center

For example, let me go to Bitcoin and I click on M1 minute and I click on download. You will see what the message says: “You are going to download data from the MetaQuotes Software Corporation History Center”. But your account is opened on the Pepperstone Limited trade server.

The download message

So it’s warning you that the data you will be downloading, it’s not from Pepperstone, but it’s actually from MetaQuotes. So to make the backtest, it’s important to do it over your server from your broker with the historical data of your broker.

The historical data is all the bars that we have in the past. If I zoom in, this is the data that we have from each candlestick. If I put the mouse on the closing of any of the bars, you will see that we have the Open, the High, the Low, and then Close.

The values of the candlesticks in MetaTrader 4
The values

The Report From The Backtest

These 4 values, they give us the data and as well, we have the Volume. So this forms the historical data which the backtest uses in the MetaTrader 4. And even when you have such a small period that’s still fine. The strategy shows a profit. It’s not dramatically losing. That wouldn’t bothering me.

If I make backtesting on MetaTrader 4 and I see a dramatic loss on the backtest, then, well, something is wrong.

Either the spread is too big for the broker or there is something wrong with the broker. You better look for another broker.

One more time, in Report we can see some statistics from the MetaTrader 4 backtest. For example, how many profitable trades we have, how many losing trades, consecutive losses, and consecutive wins. And we have the drawdown, the net profit. In this case, it is $1243.20. But one more time, that is just from 24 trades.

While in EA Studio if I go to Report, you will see a lot of statistics.

The Report from the backtest in EA Studio
EA Studio strategy backtesting Report

There’s the backtest output, which shows a lot of statistics for the strategy. We have return to drawdown, maximum stagnation, win-loss ratio, and the R-squared which is very important. Basically, it shows how good the equity line is. And then we have the drawdown, backtest quality a lot, a lot of things.

The Equity Line

On the side, we have some graphs for a count of entries by weekdays, and profit and loss in currency by weekdays. In this case, it is for Bitcoin. And then below, we see some more statistics. Monthly performance is very important. So here we can see which months were profitable and which months were losing.

As we always say in our courses, every strategy has losing periods.

This strategy has a great equity line. But if we look at the monthly performance, we see that there were actually months where the strategy was losing. But overall, the strategy is profitable because most of the time it is profitable. In this case, we have the total in years.

The monthly performance of the strategy
The monthly performance

So, in 2017 it was profitable, 2018, 2019, 2020 so far. So don’t panic. If you place the Expert Advisors on MetaTrader and you see losses, just wait a little bit longer.

First, put the EAs on Demo Account so you will see how it works and you will see some profits as well. One more time, if you want to do a reliable backtest or if you want to see more statistics, you better use the editor and import back the Expert Advisor in EA Studio.

Importing Expert Advisor in EA Studio
Click on Import an Expert Advisor back

If you don’t have enough bars from MetaTrader 4 for your broker to perform backtesting, you can use premium data that is available in EA Studio.

Backtesting on MetaTrader 4 Demo Account

It comes by default where we have a lot of bars for many trading assets. So that’s how we do backtesting on MetaTrader 4. You saw that when we use more professional tools and software like EA Studio, we can have a more detailed backtest. But I would suggest you just place the Expert Advisors on a Demo Account. This way, you will have a real simulation on the market and you will see how these strategies perform. Give it some time. Test it for a week or 2, a month, 3 months, 6 months, it’s up to you.

Everyone prefers different periods for backtesting. And this is quite understandable. So go ahead and test the Expert Advisors. There is nothing to lose. Open a Demo Account so you won’t be risking any real money.

Backtest MetaTrader 4 vs. Strategy Builder EA Studio is a free lecture from our Top 5 Strategies (+EAs) for Cryptocurrency Algorithmic Trading course. If you haven’t enrolled for the course, you can do it here.

Thank you for reading. And if you found this article useful, don’t forget to leave a comment below or subscribe to our YouTube channel where we share valuable tips, trading strategies and our trading insights.

Robustness testing check Forex trading example

Robustness Testing Example: Check If Forex Strategy Is Profitable

Robustness Testing in Forex Trading

Hello traders, in this lecture, I will show you an example of a robustness testing check using the Reactor in EA Studio.

So as I’ve already said a few times, what the Reactor does is automate the whole process. We have the Generator where the trading strategies are generated. Then if we want, they go through the optimization process and then they go through the robustness testing check.

Showing how to use the Reactor tool for Robustness Testing
The Reactor

And something very important to note is that when we use the optimization, any of the 3, this will change the strategy that comes from the Generator. But the robustness testing will not change it. It will just test if it is robust.

And this is possible again with 3 different options. One is the Walk Forward validation, very similar to what I described in the previous lecture for the Walk Forward. But the difference is that it doesn’t change the strategy.

It just proves if the strategy is robust or not, if the result of the Walk Forward is worse than the initial strategy, then this initial strategy that came from the Generator is over-optimized. And if the strategy fails, the Walk Forward validation, or any of the other 2 robustness tests, then we will not see it in the Collection at the end.

Perform Robustness Testing With Monte Carlo Validation

In the collection, I have that strategy that I used previously to show you.

Strategies go in the Collections in EA Studio
The collection

But I will leave it because I want to show you how the Monte Carlo works and the Multi Market. Monte Carlo is the tool that I always use when generating trading strategies. So this box is always checked for me.

Monte Carlo robustness check
The Monte Carlo

What Monte Carlo does in very simple words, it tries to break the strategy before we start trading with it. It runs a variety of robustness tests.

If I click on Monte Carlo, you will see that I have the option for different simulations that are separated.

robustness testing
 with Monte Carlo in EA Studio
Monte Carlo simulations

We have market variations, execution problems, and strategy variations.

How to know if your strategy is over-optimized

So how I usually use it is with the last 2 – Randomize Indicator parameters and Randomize backtest starting bar. And what that means is that the Monte Carlo will perform a variety of simulations with different or randomized indicator parameters, and it will simulate backtest from different starting bar back in time.

This way, we will know if the strategy was optimized for the Indicator parameters. Just what I explained about over-optimizing. And we will know if we start at any moment at any bar with this strategy with this Expert Advisor, is it going to be still profitable or not? And this way, we will know if the strategy was over-optimized exactly for the period tested.

Robustness Testing Check

So if I go to Collection and I select that strategy again, you see that it showed that it was over-optimized for that period.

balance chart for the strategy in EA Studio
The balance chart

And let’s go to Monte Carlo and I will click on start and let’s see what will be the results in the robustness testing check. Here they are.

The results from the strategy
The results

We have 19 out of the 20 tests validated. So all of these tests here are with different parameters, different backtest starting bar. But one of the results is losing here.

The Optimizer

So there is a very huge chance that this strategy was over-optimized. This is because I actually optimized it in another lecture. With a step of 1 using the Optimizer. And we saw that it optimized it very well for this period.

But then when I added previously 8 years, then the strategy is not really what we want to see. And actually, I changed the data a little bit, but it’s very similar. So that’s the one that I have set, for XM. And now, I will go back to Monte Carlo and I will tell you about the market variations. This is where we have Randomize spread, Randomize history data.

You can use that if you’re using different historical data or for different brokers with different spreads.

Execution Problems

Well, this will be applicable if you have some execution problems with your broker. It often skips positions or there is a vast slippage, which is not really the best thing we want to have with the broker. You can check as well the strategy with such simulations. But this is how I use it. The last 2.

Robustness Testing With Multi-Market Validation

And if I go back to the Reactor and I go to Multi Market, this is the last robustness testing checks that we have on the list.

robustness testing with Multi Market
Multi Market

A strategy that comes from the Generator, that passes the optimization, the Monte Carlo, everything on the top, and reaches the Multi Market, we will be able to check if this strategy is performing well on the other markets as well.

We can change these markets to whatever we want. Usually, if we are generating for EURUSD, for example, we want to know how the strategy performs on other currency pairs. Not on gold or stock or oil or anything like that. So I have clicked randomly on a few currency pairs and if I use the Multi Market, it will perform backtest on these currency pairs, the same strategy and it will validate a number of tests.

So if we have like 5 here and we select 3 that are validated, it means that it will validate for sure for EURUSD. And then we want another 2 to be validated.

Avoid Over-Optimization

Let me demonstrate very quickly how that works with the current strategy that we have in the editor. I will go to Multi Market and let’s change the brand to EURGBP, for example, and as well, I will select AUDUSD. And then I have AUDNZD, it doesn’t really matter. I just want to have 4 pairs and I will click on start. Let’s see how this strategy performs in robustness testing examples on other 5 markets. 1 of 3, 1 of 4. And we are waiting for the last one, here we go. All the others are losing.

Results from other markets
All the others are losing

The initial strategy for GBPUSD is profitable.

But one more time, I have optimized that and I think I over-optimized that. This is not like a 100% event. I cannot say 100% that I have over-optimized the strategy. But from what I saw after adding the previous 8 years is that the strategy is losing for most of the time and I see that the Multi Market shows me losses on the other markets. Probably the best way to say it is it’s most likely that I have over-optimized the strategy. We are not 100% sure but the chances are big.

So that’s why I don’t recommend using the Optimizer, it’s better to use the Walk Forward or the normalization. And don’t get me wrong, it doesn’t mean this is a bad thing. Not at all. You just need to know how to use it carefully and what robustness testing exactly you need to perform after that to make sure that the strategy is not over-optimized.

Robustness Testing in EA Studio

Some of the features in EA Studio are so good and the algorithm behind it is so smart. I can say that it becomes dangerous for some of the strategies because it finds quickly the best parameters. It optimizes them very quickly. This is the work of the Optimizer, but at the same time, this is risky not to over-optimize it, just like driving a very fast car, which is dangerous.

People want to drive always fast cars, but this is when usually the accidents happen. So you need to be very careful when using it or just play more with it, see how it’s working. And if you have any questions, of course, feel free to ask me in the forum.

Setting Data Horizon

I will remove now this strategy from the collection and I will run the Reactor. This is how I perform a robustness check most of the time. Usually, it works faster.

But again, I have a few more running on the same computer. So when you run 3, 4, 5, or more, they might get slow. Keep in mind that EA Studio works in the browser and it loads from the server the 1st time and then it works on the browser. It’s web-based, which gives you the opportunity to run it on multiple browsers at the same time.

So what do I usually do? I set 1 for EURUSD. And now just next to the recording screen, I have a few more for GBPUSD, EURGBP, and this is how I am generating strategies. One thing I forgot to do is to reduce the data. I will go to Data, Data Horizon and I will do it just for the last 5 years.

Setting the Data Horizon
Data Horizon

I will start again.

And one thing, keep in mind that the more data you use, a little bit slower it will be, the less data, the faster it will be. It’s logic. So this is how I am using the Reactor.

It’s a lot of possibilities through the options. You can test it, use whatever makes sense to you. But definitely, it’s the best thing we can use in algorithmic trading nowadays to have robust strategies and to have many strategies.

How does it work?

It will generate strategies if they pass the Acceptance criteria, the Out of Sample, the Normalization, and the Monte Carlo robustness check. I will see them in the Collection.

So basically, they will go through a tough robustness testing. And at the end of the day, I will have hundreds of strategies, maybe thousands of strategies, and I will see the best ones into the collection.

I will leave it now running for some time. Actually, I have set exactly 10 hours. And after 10 hours, I will show you what results I have in the Collection and you will see how easy it happens. I don’t do anything.

I will leave it overnight and in the morning I will have some ready strategies in the collection.

Thank you very much for reading. If you found that article useful, leave a comment below and if you haven’t subscribed to our YouTube channel, make sure to do it now.

If you have any questions, let me know.

Cheers.

Backtest Forex Strategy

Backtest Forex Strategy: MetaTrader vs. EA Studio

How to Backtest Forex Trading Strategy?

Hello everyone, in this lecture, I will show you how you can backtest Forex strategy Expert Advisor on MetaTrader & EA Studio.

It is very important to backtest an Expert Advisor before trading with it. And as well, you need to know how to backtest it exactly, depending on how the Expert Advisor works.

As I’ve said, these Expert Advisors work on the opening of the bar. So this is the option we will be using.

Market Watch with Forex Expert Advisors
The Expert Advisors

Now, if you want to backtest Forex strategy Expert Advisor, you need to click over the chart, go to Expert Advisors and go to Strategy Tester.

Showing how to Backtest Trading Strategy with MetaTrader Strategy Tester
Click on Strategy Tester

A new window will pop up below and usually, everything is fulfilled automatically.

Model Options Settings in MetaTrader
A new window pops up below

You can see the Expert Advisor, the currency pair, and Model is Open prices only because these Expert Advisors open trades on the opening of the bar. So they use the open price.

And if I click over it,

Model options in MetaTrader 4
The Model options

you will see that we have every tick, the most precise method, it says, but there is no tick data in MetaTrader. It’s a kind of an illusion here that we actually don’t have big data, but there is such an option. So, don’t go for it. So we have control points and we have on the bottom the open prices only which says the fastest method and you will see actually how fast it works. On the right side is the period, the spread.

The Report

And all you need to do then is just click on start and you see it happens for less than a second. It’s super fast. And if I go to results,

the results in metatrader
The results

you will see that I see every single trade where it was opened, where it was closed, how the balance line went and how many trades basically I had. And if I go to the graph,

the graph in metatrader
The graph

the more interesting thing is you can see how the equity line went with the strategy. It is on profit.

We have as well report where we see some statistics.

backtest trading strategy results
The results

But this is really not enough what we see as statistics. We have consecutive wins, consecutive profit. And what’s interesting here, we have consecutive losses as well. We have the maximal drawdown, which is 1.71% pretty good. But for me, that is not enough

How to Backtest Forex Strategy in EA Studio

Now, I will show you how to backtest a trading strategy in the EA Studio strategy builder software.

But let me close it and I will make one more backtest on USDJPY on M15 for example. I will right-click and go to Expert Advisors and I will go to Strategy Tester. Here it is. All is set automatically and I click on start and let’s see what we have as a graph. Here it is.

backtest trading strategy graph
The graph

You can see the strategy is different. The backtest is different. We have a bigger drawdown right here.

Use Historical Data to Backtest Forex Strategy

I guess we will see in the report. Maximal drawdown of 3.07%.

Maximal drawdown
It has a Maximal drawdown of 3.07%

But again, this is not enough as statistics and as well it is not enough as total trades 121.

total trades
I have 121 as total trades

And why I have all the 121 trades is because I don’t have enough historical data on Meta Trader. 121 trade that happened in the past is not enough for me to consider this strategy as robust. Of course, I know it is robust because I have done the test on EA studio and I know that for many more count of trades the strategy is profitable.

But if you buy an Expert Advisor from the market and you test it on Meta Trader and see just 121 trades, you will be like, oh, I’m not really sure if this is a robust strategy. Because the strategy executed just 121 times and I’m not sure if it will work in the future. That is why we want to see a minimum 300 count of trades, 500 is preferable, more it is even better.

I continue about a week after I have placed these 12 Expert Advisors on a small Live Trading Account for the purpose of this course. And you can see that already I have a 15 USD profit, not a lot of profit for 5 days.

$15 profit
I have a $15 profit

But as you notice, as time goes by, the profit gets a little bit bigger. We see all the trades that opened and closed. Some more Take Profits were hit, and 15 USD in 500 account is 3%. Not bad for 1 week.

Demo Account

And obviously, I have these Expert Advisors on bigger accounts. But, one more time, I wanted to show a relatively small amount for this course because I don’t want anybody to accept it as a recommendation. If I show a bigger amount, I don’t want anybody to feel like trading with a bigger amount. I want you to start with an amount you feel comfortable with. Of course, as I always say, start first with a Demo Account.

You saw how the backtest on MetaTrader works and how it looks. And now I will show you what’s different when we backtest Forex trading strategy with strategy builders. We did it for the USDJPY. Here it is. You see some nice trades, some short trades happened recently.

recent trades
Some short trades happened recently

I will go to File, Open Data Folder,

data folder
Go to File, Open Data Folder

I will grab these Expert Advisors for the USDJPY. So I will click on Experts,

trading experts
I click on Experts

and I will take the 2 USDJPY Expert Advisors. Let us copy them and I will minimize the VPS.

USDJPY Expert Advisors
I copy the 2 USDJPY Expert Advisors

I have the Expert Advisor Studio with some strategies that I recently generated for the GBPUSD. But I will show you later on in the course how I am doing it. I will go to Strategy, and right into the editor we see an arrow where we can have a drop-down menu and I will go for the option to Import an Expert Advisor back or this is possible as well with the ctrl + I from your keyboard. I will just click on it.

backtest trading strategy expert advisor in EA Studio
Import an Expert Advisor back

Williams’ Percent Range

And on the folder that I have prepared before the lecture, I will paste the 2 Expert Advisors for the USDJPY. Here they are.

Expert Advisors for the USDJPY
I paste the 2 Expert Advisors for the USDJPY

Let’s open the first one, for example, the one for the hourly chart. Click on Open and you can see what is the strategy behind the Expert Advisor.

The strategy

I will show you so much more statistics. You see what a balanced chart I have.

As well, you can see backtest outputs where we see the most important like profit per day, but that’s for 0.1 lot, maximum drawdown, return to drawdown ratio, count of trades. And in the middle, we see the strategy itself. Something we don’t see in the trading strategy backtest on MetaTrader. I have an entry rule with the Williams’ Percent Range. If I click on it, you will see that Williams’ Percent Range is the Indicator and the rule is Willams’ Percent Range crosses the level line upward, period of 23, Level of -14.

The entry indicator

And I have an exit rule with the Envelopes and the condition is the bar opens above Upper Band after opening below it, and we have the parameters below.

backtest trading strategy with the exit indicator
The exit indicator

What more do I have? I have the Indicator chart which is absolutely fantastic.

backtest trading strategy with indicator
The Indicator chart

You can see where the trades were opened and closed exactly. And where we have short trades and long trades. So for example, when we have red bars or small lines, you can call them below the chart, it means we are in a short position. And for example, right here we have 2 long positions.

Take Profit and Stop Loss

So you see where the new bar opened according to the entry rule and where the Take Profit was hit. The green small lines are the Take Profit and below that is the Stop Loss.

take profit and stop loss
Take Profit and Stop Loss

So every strategy obviously has losing trades and don’t expect to find strategy only with profits. But, of course, we wanna have more profits than losses. And with strategy builders like EA Studio, it’s very easy to find such strategies. And I will show you later in the course. But let’s have a look, for example, at that trade here. The bar opened after we have the Williams’ Percent Range crossing the level line.

Then we have the Take Profit, Stop Loss is somewhere below. I cannot see it at the moment. And I have as well the exit condition, which in this case, I think applied right over here. With this trade, you can see the trade was open here. The Take Profit was not hit. I have the exit condition.

trading strategy exit conditions
I have the exit condition

If I go back to Editor one more time and I click on Envelopes, the bar opens above the upper Band after opening below it, we have the bar that opened above the upper band after opening below it.

backtest trading strategy real example
The bar that opened above the upper band after opening below it

The Bollinger Bands

And this is actually a very interesting situation and example that I caught here accidentally. And I want to explain it a little bit more. So stay with me. This is very important what I will tell you in the next few minutes. Now, in manual trading, when you go back over the chart and you put the Indicators and you want to see how the strategy would behave, where is the trade, where the Indicators crossed, and so on, it is very tricky and misleading because the Indicators are repainting.

Now, at this moment right here, the opening of the bar was above the upper band and the opening of the next one is higher. What happened is just the Bollinger bands, it continued and it changed and when we look at it later, it looks like the bar was below the upper band. But the strategy builder, the software clearly shows that at that moment the bar opened above the upper band and not below it.

I will say it one more time. At that moment when this bar opened, the Bollinger band was below the opening point. And we see it above now because the Indicators repaint. They follow the price and they change after the price. So if I put the mouse exactly on the opening of the bar, I want you to focus on the values that we have below the chart. You will see that I have a bar with open price 105.988.

The Envelopes

The exit Indicator, which is the Envelopes, has upper band with value 106.01 which is the fixed value after the bar was closed.

But at that moment when the bar was opened and the price went up and down for 1 hour, this value for the upper band of the Envelopes, it was moving up and down, OK, it was not 106.01 the whole time it was moving, it was changing. And at the opening of the bar, it was below the price of 105.988.

That value of 106.01 came later when the bar was closed. So what happened? The trade actually closed here, but if we go back and look at it, we will not see that we have the exit. So this is the huge, huge difference when we use strategy builders like EA Studio and this is the benefit to backtest Forex strategy because we see exactly what happened, where the trades were open and closed. You can see here consecutive profitable trades. Very beautiful.

Long trades, another one, third one, fourth one, fifth one 5 consecutive trades on a profit. Very nice. And if I don’t have that and I just put the Bollinger band and Williams’ Percent Range on MetaTrader, and I look at the chart. I don’t know when this happened. I don’t know at any moment am I in the trade already or am I starting here? Should I exit here? You can see how hard it is. It is just on the upper band of the Envelopes.

Backtest Forex Strategy with EA Studio

Sometimes, it is so hard to understand the value of the Indicator, it is just a few points and pips, and here I can see very clearly that I had a trade opening. In this case, it was because of Williams’ Percent. Same thing with Williams’ Percent Range. You see that there is a cross. Sometimes it looks like a touch and you cannot be sure on the chart on MetaTrader whether there was a cross or not.

But if I put the mouse on it, you can see very clearly now that the Williams’ Percent Range level at this moment was -15.831. And the previous value was -10.484 which means that it was below the -14 and then it went higher.

The Williams’ Percent Range values

But sometimes it looks like a touch over the chart and you cannot understand what happened there. Was there a cross or not. And if you don’t backtest Forex strategy and if you don’t have the strategy builder, you cannot really understand how the strategy works.

You don’t know where the trades were open and closed, but with EA Studio especially, which I find to be the best strategy builder at the moment for the last 3 years, I can tell that this. It’s not just because we have integrated on our website, but because we have been testing all of the strategy builders out there, all of the software available. And obviously, I want to use the best one at every moment.

The most profitable trades

EA Studio is so much ahead of every other software. And that’s why we have integrated on the website. There is a free trial that you can take advantage of on the homepage. There is a free course as well. And in the next lectures, I will show you more about EA Studio, how I am using it, how many other traders are using it, how we generate and create new strategies, and how much easier is algorithmic trading with such a piece of software.

What’s more, statistic is not just the Indicator chart, the balance chart, and what we see right here on the Editor. But if I click on the report, you will see stats information which will give you so much more about the strategy.

Stats info

This is the backtest outputs. So you see how many things we have as information. We have the Balance Chart. We have the Count of entries by weekdays, Profit and loss in currency by weekdays.

So we can see when this strategy profits the most. Obviously, in this case, it is on the Thursdays. And if I scroll lower, you will see much more information and you can see the profits and losses by entry hour you will see the position profit by position holding time.

Additional info

So what that means is that the most profitable trades are just in the first hours. You can see a lot of green dots over here and below we have monthly performance in currency so we can see back from, in this case, November 2017.

Risk Diversification

I have said it this way, just to have a look at it for the last 3 years. But you can notice that there are months of losses for this strategy. This period over here in 2018 was horrible for this strategy, but that’s normal. We always have profitable trades, losing trades. We have profitable months, we have losing months as well. But the idea is that with EA Studio we can have these kinds of strategies where we will have more profits than losses.

And when I trade a portfolio of strategies or I trade, for example, 12 Expert Advisors like what I’m demonstrating in this course, they compensate each other. When this strategy was losing in this period, the others were profiting. And this is exactly the risk diversification. And I’ve mentioned that I have selected to use 3 years of historical data to backtest Forex strategy, but if I go to data and I go to data horizon, I can increase it as much as I want up to 200 000 bars.

Data Horizon

And this is because I’m using the premium data or this is the data from the Forex historical data app that I already showed, which is the best solution. And this data comes automatically in EA Studio, so I don’t need to download it. It is here all the time. All I need to do is to make it work for the broker that I have selected to use and in the next videos, I will show you how I’m doing that.

Take advantage of the 15 days free trial

So this is the difference between when we use EA Studio software and when we backtest Forex strategy on MetaTrader. Honestly said I’m not doing backtest on MetaTrader. I just show them in some of my courses when I compare the software and I compare MetaTrader, it’s a huge difference. But of course, that’s professional software. However, I will share some more of it in this course.

But if you don’t want to do it by yourself, no worries. I will include the already 12 Expert Advisors always. So you will not need to do it by yourself. All you can do is just play with it. Use the 15 days free trial. It has no obligations and you can export as many Expert Advisors as you wish. That’s the beauty – with 1 click I export the Expert Advisor. I don’t need to have programming skills. I don’t need to hire developers. It works with 1 click. This is why initially I took it.

Then after I saw its capabilities, I knew immediately that we needed in the Academy and everyone in the team uses it and now hundreds of our traders. And that’s why I’m sharing it with you. Let’s go for the next lecturers together and you will see more of the course and you will learn more about Expert Advisors.

Cheers, guys.

MetaTrader 4 Tutorial for Beginners

In this MetaTrader 4 tutorial, we will show you more about the MetaTrader platform, especially if you are a beginner trader. Moreover, we will give you some tips that you need to know before you trading with Expert Advisors on MT4.

Later in this lecture, you will be able to download a MetaTrader 4 tutorial in PDF and learn how to use the platform with examples.

Now, let’s jump into this MetaTrader 4 tutorial for beginners

This is how the MetaTrader platform looks like after you install it.

MetaTrader tutorial - The platform
The MetaTrader platform

I have selected MetaTrader 4 for the purpose of this course and for most of my courses because it is the most common platform for trading. It allows algorithmic trading, which is very important, and it is free. The brokers pay the MetaQuotes Company and the brokers provide the platform to us for free.

We don’t pay any monthly fees, charges, and so on. What we pay the brokers is the spread. This is the difference between the Bid and the Ask price.

Bid and Ask price MetaTrader tutorial
The Bid and Ask price

For the beginner traders, when we buy an asset, we buy it on the Ask price or this is the more expensive price. And when we sell the asset, we sell it on the Bid price, which is the cheaper price.

For example, if I buy one trading lot at the moment at the price of 1.1860 and the price rises to 1.1960, this will be 100 pips of a profit. If I close the position at that moment, I will be closing it on the Bid price. Therefore, the broker will benefit from the difference between the Buy and the Sell prices. This is very normal and it is important to know when you are trading with Expert Advisors.

The Swap

The other cost that we pay the brokers is the swap. The swap comes if we hold our position overnight. If I buy EURUSD today, for example, I hold the position overnight, and I close the trade tomorrow, I will be charged a swap. This is the fee that the broker takes if it transfers the trade to the next day.

It is the same thing if you sell, but some brokers will give you actually a positive swap. In other words, if they hold your position overnight, you may benefit from that.

Let’s see, how much is the swap, for example, for EURUSD. If I right-click over the Market Watch, over the EURUSD and I click on Specification,

Specifications
Right-click over the asset and click on Specification

you will see below that I have some details about the asset.

Asset contract specification
The asset contract specification

I have a Swap long negative and I have a Swap short positive. This means that if I keep my short trade overnight, I will have some positive swap out of that.

In this MetaTrader 4 tutorial for beginners, you will see a MetaTrader 4 Tutorial PDF attached with some basic terminology about Forex trading which will help you learn all of these terms faster.

In the Market Watch, we see all of the assets that the broker offers you. However, if you don’t see too many, right-click anywhere on the Market Watch and check Show All.

MetaTrader Market Watch tutorial
Right-click over the Market Watch and select Show All

This will display more assets that are provided by the broker. Of course, it depends on the broker that you are using and the type of account you’re using.

MT4 Live Tutorial

So on the left side, we said that we have the Market Watch with the Bid and the Ask price.

The Market Watch in MetaTrader 4
The Market Watch

This is from where we can select the assets we want to trade. If you don’t see all the assets, you can right-click and check Show All.

Click on Show All

This will display some more assets depending on the broker you’re using.

And if you want to open a new chart, you just click on the symbol and you go to Chart Window.

Select Chart Window

So right here I have already opened 2 charts for Bitcoin and I have some more for Forex which was opened by default when I installed the MetaTrader.

currency pair tutorial MetaTrader 4
I have 2 Bitcoin charts open

So let me remove those. And I have 1 chart for Bitcoin on hourly time frame and the other one I can change, for example, to M15 timeframe.

Types of Charts

We have actually 3 types of charts. We have bars, we have candlesticks, and we have line chart.

Types of charts

The most popular is candlesticks.

So when we are on M15, this means that 1 candlestick or 1 bar represents 15 minutes of a time. The chart is a representation of the price which we have on the right side and the time which we have below the chart. Where these 2 meet, we have the candlesticks.

And if we are on hourly chart, then 1 candlestick or 1 bar represents 1 hour time frame. And for each candlestick, for each bar, we have the opening of the bar, we have the closing of the bar, the highest point and the lowest point.

Positive bars and negative bars

So in this case, the negative bar is represented with white color and the positive is with black color.

Representation of positive and negative bars

So if I put the mouse on the closing of the bar, you can see exactly what are the values for the open, high, low, and close.

The values

And what happens after the bar closes, a new bar opens. So we have the closing of that bar and then the new bar opens. The price goes up and down. It closes at one level.

And because the closing was higher than the opening, we have a positive bar that is fulfilled with black and all of these colors you can change from Properties.

Click on Properties

And if you go to colors, you can change what you want to see on your chart.

Select Colors

The price always matter

Now, I’m not touching that because when trading with Expert Advisors, it really doesn’t matter what you see on the chart. It doesn’t matter if you are on a candlestick chart, on the bar chart, what are the colors?

We don’t put any Indicators. Nothing over the chart. I just wanted to give you a brief idea of what we see on the chart as price, because at the end of the day, the price always matters. And that’s the most important thing that is on the chart.

But for trading and strategies and Expert Advisors, we use different Indicators. So if I go to insert, Indicators and I click randomly on any of those let’s say I’ll select the trend Indicator called Bollinger Bands, which is a very popular Indicator in algorithmic trading.

I click on Bollinger Bands

You will see 3 lines that are around the price. But I’m not going into Indicators.

The Bollinger Bands on the chart

Creating strategies

I’m not going to explain any complicated stuff because you really don’t need to know it. And I will go to Indicators List,

I click on Indicators List

and I will remove it.

I remove the indicator

One more time, when trading with Expert Advisors or with Robots, you don’t need to place anything over the chart.

The Indicators, the trading rules, they will be inside the Robots. And I will show you later on in the course what are the rules, how I create the strategies, how I test them even before putting on a Demo Account.

Then on the left, below the Market Watch, we have the Navigator.

The Navigator

This is where we have the accounts. As I said, you can have many accounts with a broker, but if you want to test Expert Advisors on different accounts, you need to install different platforms as well.

Expert Advisors

Below, we have the Indicators very similar if you want to insert them from Indicators or you will insert them from the Navigator, just double click on it and it will be over the chart. For example, the Accumulation Indicator is displayed below the price, not over the chart.

The Accumulation Indicator
The Accumulation Indicator

So let me remove it for the purpose of this MetaTrader 4 tutorial. And then we have some scripts that are useful for algorithmic trading and different purposes. But the most important is Expert Advisors. And I have 1 Expert Advisor for Bitcoin.

And in the next lectures, I will show you how I’m creating Robots, Expert Advisors, how I’m testing them and how I am installing them on the MetaTrader platform. Below the Navigator, we have the Terminal where we see our balance or our account, the equity, and the margin?

The Terminal

Leverage

So basically, the margin is how much free money we have in the account, how much we have blocked from the account, and how much free margin we have in the account. So when we start opening positions, some of this amount will be blocked.

And this depends on the leverage you’re using. For example, in Europe, we have the ESMA regulation since 2018 and we cannot have leverage more than 2 to 1 for the Cryptocurrencies, which means that if I want to buy a whole Bitcoin, I will need at least to have somewhere about $10 000. Depends on what the price of Bitcoin is at the moment.

But the leverage for the beginners with simple words is the amount of money that the broker borrowed the trader to use for trading. So if I have $5 000 in my account and I use leverage 2 to 1, then I will be able to Buy maximum with $10 000. If I use leverage 100 to 1, then I will be able to Buy 100 times more from what I have in the account. And of course the leverage is very useful.

Trade small

But when you are using it carefully, we don’t Buy with all of the money of the account because if you use high leverage and you open position with all of the money, then it is very likely that you will blow your account. Of course, you can make very quick profits, but that probably will be more of lucky trading. And at the same time, as I said, it is very likely that you will just lose everything in the account.

So take it easy with the leverage. It depends on where you live and what type of broker you use, but it is always very important to trade small piece from your amount so you are not risking the whole capital in a few trades. And this is how usually beginner traders lose their money in the 1st month of their trading.

Risk Diversification

The broker we’re using for this MT 4 tutorial, for example, offers more assets on its real account, which you will see later in the course. In this course, I will focus on the GBPUSD, which I believe you will be able to find with all of the brokers.

Actually, the GBPUSD is the third most traded currency pair, the first being EURUSD. The second is USDJPY, and the third spot is GBPUSD.

However, in most of our courses, we include different strategies for different assets. In other words, if you have already many of our courses, you will have Expert Advisors for EURUSD, USDJPY, EURJPY, and EURGBP.

You will have a great diversification of your risk by trading different assets.

For this course, I will include different strategies for the GBP so you will not rely on one single strategy or one single Expert Advisor. And still, this way, you will have an excellent risk diversification which you will see a little bit later in the course.

If you want to trade any of the assets, all you need to do is to right-click over it in the Market Watch and go to New Order.

MT4 New order tutorial
Right-click over the asset and click New Order

This is where you can execute an order, you can set the volume, how much you want to trade, the Stop Loss and the Take Profit.

MetaTrader tutorial order interface
The order

MetaTrader 4 Tutorial: The Navigator

If you want to execute the market price at the moment you can just sell or buy. Or you can use a pending order. In other words, you can select what type of pending order you want to do and select the price at which you want to buy or to sell.

I’m not doing manual trading and I won’t be executing trades manually. You will see how I do it all with Expert Advisors.

In the Navigator, you will see that we have the Accounts. In addition, this is where you will see your account that you opened with the broker, if you have a Demo or if you have a live account.

Then we have different indicators that you can use for your strategies.

The Navigator in MetaTrader
The Navigator

After that, we have the Expert Advisors, which I will show you how to put on your MetaTrader just in the next lectures. Below we have some scripts that are useful for different purposes when you’re using MetaTrader but I am not going into details about that in this tutorial.

The Demo account

Below the Navigator, we have the trading terminal where you will see the open trades and the closed trades. Moreover, we will have the account history where we will see all trades that open and closed.

I have opened a Demo account of 50000 USD, this is virtual money. So if you open a Demo Account and you lose, regardless of whether you are doing manual trading or with Expert Advisors, don’t worry – this is virtual money. In other words, you won’t owe anything to the broker. You can always restart your account and practice. This is the best thing.

To sum up, when you have a Demo account that you are actually trading, you have access to the market and you can practice without losing anything.

Don’t hurry to risk real money until you are confident with the system and until you feel satisfied with the strategies, with the Robots that you’re using. Not just from this course, but any other strategies that you learn.

Make sure to practice and make sure to master it before risking real money on the market.

In the middle of the screen, you see the charts and you can modify those. I can right-click and select Tile Windows. This will split the window into 4 charts, and I can close them if I want and leave just one. As I’ve said in this course, I will be trading the GBPUSD.

Customize the Candlesticks in MetaTrader 4

For the Expert Advisors, it really doesn’t matter if you have indicators over the chart or not. Therefore, what I like to do for the purpose of this MetaTrader 4 tutorial, is just to remove the indicators from the chart, and as well I remove the grid behind. So I can right-click over the chart, go to Properties,

MetaTrader 4 Properties
Right-click over the chart and select Properties

and from Common I can uncheck Show grid as well.

Common settings
Common settings

I can change the colors of the candlesticks or I can leave them the way they are.

MetaTrader 4 color settings
Color settings

It doesn’t really matter for algorithmic trading.

One more time in this MetaTrader 4 tutorial for beginners, I will go to Indicator’s List because I didn’t remove the Moving Average.

The last thing, I will uncheck One-Click trading because I don’t need it. This is the default chart and I can actually save it as a template. I will right-click over the chart, go to Templates, Save Template,

Working with templates on MetaTrader 4
Right-click over the chart, go to Templates, select Save Template

and I will save it as Empty template.

Save a template on MetaTrader 4
I save it as Empty template

This way, I know that whenever I want to have an empty template, I can easily do that.

The 4 Candlestick Values

You can modify your MetaTrader trading platform any way that you want. For instance, you can switch to a bar chart or to a line chart, which is the very same thing.

Switch to bar chart or line chart in MetaTrader 4
You can switch to bar chart or line chart

But with candlesticks, we have a more visual representation of the price by having the candlesticks colored according to whether they were bullish or whether they were bearish.

The candlesticks in MetaTrader 4
The candlesticks

In other words, if they were positive or if they were negative. And if I put my mouse on the closing of any of the candlesticks, you will see that I have 4 values: High, Low, Close, and Volume.

The candlestick values
The candlestick values

These 4 values are for the historical data which we are using in algorithmic trading to create Expert Advisors and to backtest Expert Advisors.

And the current price for GBPUSD is 1.3126 and all the rest that you see before that is called historical data.

GBPUSD price in MetaTrader
Current GBPUSD price

In another lecture, I will show you how we use this historical data to create strategies and Expert Advisors and to see how they performed until the moment. And along with the lecture, I will show you more about the MetaTrader platform, so you will feel comfortable with it.

This is about the MetaTrader platform tutorial for beginners. If you have any questions, let me know. By the end of the MetaTrader 4 course, you will know exactly what you need to do in order to test Expert Advisors and to see some profits into your account.

But if you just play around with the trading platform, you will see that it is very easy to use, and especially for algorithmic trading is just a few clicks to put the Expert Advisor on the MT4 chart and to make it start trading for you. Thanks for reading this MetaTrader tutorial for beginners. See you in the next lecture.

Most Traded Currency Pairs

Most traded currency pairs

Hello traders, in this lecture, I will share with you what is the plan that I follow while trading with the portfolio Expert Advisors, which are the most traded currency pairs, and why I use these major Forex pairs in my trading. Moreover, I will share with you what timeframes I select for my trading.

For this trading portfolio, I have selected the GBPUSD, the EURUSD, and the EURGBP. I will tell you why.

Most traded currency pairs in 2019
Most traded currency pairs in 2019

For the previous year, you can see above that the EURUSD was the most traded currency pair with 24%. Secondly is the USDJPY with 13.2%, and the third is the GBPUSD with 9.6%.

These 3 are not just the most trader currency pairs for the last one year. Usually, these are the most traded currency pairs in general. My trading is around these Forex major pairs. The Aussie (AUDUSD) which is in fourth place with 5.4%, USDCAD with 4.4%, together with the NZDUSD are known as commodity currency pairs.

Their value quite often depends on the export and the import of these countries. Sometimes there are unexpected moves. For example, the USDCAD is very closely related to the price of the oil, because one of the main exports of Canada is oil.

Usually, I stay away from these Forex currency pairs when I do portfolio Expert Advisors. This is because I really don’t want to combine trading with the Expert Advisors with the fundamental analysis. I can do that, but especially for beginner traders, it’s quite difficult. I don’t want to get into these details.

EURUSD leads the most traded currency pairs

So I have selected the EURUSD, which is definitely the number 1 most traded currency pair. Moreover, I have selected the GBPUSD, which is the third. In addition, I have selected the EURGBP so I can have equal exposure. Because in EURUSD, I have one time the EUR, I have one time the USD.

In GBPUSD, I have one time the GBP and one time the USD. Meaning I have 2 times the USD, 1 time the EUR, 1 time GBP. And when I add EURGBP, I will have for the second time EUR, and I will have the second time the GBP. Each currency appears twice in these pairs. In total, 3 currency pairs, 3 currencies, and equal exposure.

This is something we have discussed with many of the students and recently with my colleague Ilan, that it is really important to keep equal exposure between the different currency pairs. Quite often, the mistake is that the traders test many Expert Advisors and strategies, like dozens or hundreds, and they take the top 10 performers, for example.

Equal exposure

But quite often, the top performers are all with the USD. It could be EURUSD, GBPUSD, and USDJPY. If you place these top performers on your live account, you will have huge exposure to the USD because it is in each currency pair that you trade.

Let’s say you are testing many of the Expert Advisors from our courses on a Demo account and you take the top 20.

I would suggest you take, for example, 5 from EURUSD, 5 from GBPUSD, 5 from EURGBP, for equal exposure. It’s not necessary to choose the Forex major pairs. If you want to have 5 from USDJPY, you need to have 5 from EURJPY as well or from GBPJPY so you have equal exposure between the different currencies. I hope that’s clear.

It’s quite important because if you select to trade Expert Advisors only with the USD and there happens to be a dramatic change in the price in one day or in a week with the USD, it might affect the whole portfolio negatively, something we want to avoid.

But when we have 3 currency pairs, even if the USD, for example, has an unexpected move, then EURGBP will not be really affected by that. You will not have that risk in your account.

Stay with me to learn more about algorithmic trading with the most traded currency pairs

For the purpose of this course, I have selected to use GBPUSD, EURUSD, and EURGBP. They have equal exposure, and I have selected to use the H1 timeframe.

This is one of the timeframes that I like the most. Not that I’m a fan of this timeframe. But after testing so many strategies and Expert Advisors during the years, H1 is very suitable for algorithmic trading, especially for the beginners, to follow the results.

I will be sharing these strategies and these portfolio Expert Advisors with you. That’s why I have selected the H1 timeframe because I find it very suitable for both beginners and advanced traders. What I will do in the next lectures of this course is to show you how I create the Expert Advisors, how I test them for one month, and how I place them for trading in my accounts.

This is what I do all the time. I create Expert Advisors, I test them, and I trade with them. As I trade with Expert Advisors, I create new ones and I test them. That’s an ongoing process. I’m quite happy to share these portfolio Expert Advisors with you.

In conclusion, I will show you how I create them and how I’m testing them in the next lectures.

Stay with me and you will learn a great system for algorithmic trading.

How to Backtest EA

How to Backtest EA on MetaTrader

How to backtest EA

In this article, I will show you how to backtest EA online on MetaTrader or in other words, how to see the performance of the Expert Advisor. As I showed in the previous lecture, the Expert Advisor is a trading strategy that is automated.

So in this account, I have now 13 Expert Advisors. I’ve been trading with 12 of them. And I have added one more, which I have displayed over the chart, placing the indicators. But as I have concluded, it is really hard to follow the Indicators manually. We need to spend a lot of time in front of the screen. So the best solution is to trade with Expert Advisor.

Now, when you get an Expert Advisor, no matter where you get it, whether you buy it from the market, whether you create it by yourself using strategy builders, or you code it, or you take it from our course, you have backtest EA. This way you will be able to see how this strategy performed with your broker.

Backtest EA on Different Brokers

Now, we test the Expert Advisors on a few brokers. Obviously, we can’t test them with all of the brokers. There are thousands of brokers around and that is why the best thing you can do when you have an Expert Advisor is to perform backtest EA on your broker.

And if you do actually a backtest on a few brokers, you will see how different the results are.

In our courses we have demonstrated many times that if we trade with the same Expert Advisors on different brokers, we get totally different results.

It is because the spread is different on the brokers, the commission, the swap, the prices. Usually, the brokers have different liquidity providers, which simply means that they receive different prices and usually it’s a very small difference.

But when trading with Expert Advisors, we are very accurate in executing the trades and we can see that difference.

Now, how to backtest EA on MetaTrader?

First, I will need to attach the Expert Advisor over the chart so I can double-click on it, or I can drag and drop it over the chart and I will see the small input menu.

The input menu

And I don’t want to trade with the Expert Advisor right now. I just want to show you how to backtest EA online. But anyway, I will attach it over the chart.

Let’s say I will be trading with 1 complete lot and I click on OK. We see a smiley face, which means the Expert Advisor is attached over the chart.

The smiley face

EA Backtesting with MetaTrader Strategy Tester

You see where your trades opened and closed.

Now, what I need to do is right-click over the chart and go to Expert Advisors and select Strategy Tester.

Backtest EA with MetaTrader Strategy Tester
Go to Expert Advisors, then Strategy Tester

A new window will pop up below the terminal. And there we have the setup for EA backtesting on MT4. Now, what’s very important with the Expert Advisors that are created with EA Studio is to use as Model, “Open prices only”, and usually all the rest is set automatically.

Use Open prices only as Model

You can see I have the symbol EURUSD and I have a period of M15. It’s up to you if you want to backtest EA on the current spread or you would like to put a little bit higher as 10, which I usually do, and then we can select the date. Let’s backtest this Expert Advisor for the last 2 years.

So we are in September 2020. I will just go back a little bit to September 2018 so I can backtest EA for 2 years. And then instead of today, I will select the 1st of September 2020. So we have exactly 2 years to backtest EA online. Now, below we have the Visual mode.

Backtest EA Strategy Tester Visual Mode
Strategy Tester Visual mode

So if you keep it checked, you will see the actual EA backtest on the chart. Let’s see how that looks. I really like it, by the way, because it gives you a visual presentation of where the trades were opened and closed. Before I click the start button, you can see there are Expert properties, from where you can change the parameters for the backtest.

Expert properties for backtesting EA on MT4
Expert properties

We will use 1 complete lot to backtest EA

As we said, let’s make backtest EA online with 1 complete lot.

Lots used to backtest EA
We will use 1 complete lot to backtest EA

I click on OK, and I click on Start and the chart starts to move. This is since the 1st of September 2018 and the EA backtest in MetaTrader starts after the first 100 bars, so we will see the first trades opening in a while, or if you want to see it faster, you have the Visual mode from where you can increase a little bit the speed.

What I was saying is that some strategies are more active and they open trades all the time. But that’s not always the best case because we pay more spread to the broker.

Some traders prefer to trade with active strategies. Others prefer to trade with strategies, where the trades happen rarely or we have more confirmations. This strategy is just a normal one, which has 2 entry conditions, as I showed, and 1 exit condition, Stop Loss and Take Profit. I will increase it to the maximum.

It goes fast and the EA backtest is complete. In the end, it shows the indicators that the EA backtest uses. This is exactly the Bollinger Bands, the Escalator Oscillator. And as well we have the 2 Moving Averages, which in this case are displayed with the same color.

EA backtest on MetaTrader platform
The EA backtest

Over-optimized strategies

Now, below we have a few tabs. One is the Results where we can see all the trades that happened from September 2018 until September 2020. The final balance is at 15 203, which means it’s about 50% of a profit, or that would be $5203.99.

And if I go to the Graph, you’ll see the equity line of that strategy.

EA backtest Equity line
Equity line of that strategy

It started at 10 000 and had a couple of drawdowns and stagnations. It reached to 16 555 and it ended at about 15 200. So that’s quite a normal strategy, again I say, an Expert Advisor with profitable periods and losing periods.

And every single strategy has losing phases, losing periods, or consecutive losses.

In other words, we can say that during this time, for example, the strategy was just losing. The market conditions were not appropriate for the strategy. So it did more losses instead of profits. But overall, the strategy is profitable. In the long term, that is a profitable strategy.

And really try not to look for the strategies that have a perfect EA backtest online. These are usually the strategies that the people sell on the market and they are just over-optimized, or in other words, their parameters were fit perfectly for the EA backtest to show you great results. And usually, this kind of Expert Advisors blow the accounts of the traders.

Why do we trade many Expert Advisors?

So, one more time to summarize it, every strategy has losing periods and profitable periods, and this is why we trade many Expert Advisors simultaneously. So when one of them is in a losing phase, the others will compensate for it.

This article is based on a free lecture from the MetaTrader 4 Forex Trading course + Weekly Robots course. In the next lecture, I will talk more about trading many Expert Advisors. What are the benefits? And you will see the difference when we are trading with 1 Expert Advisor or when we are trading with many Expert Advisors, you will see how different the backtest is.

So don’t hesitate to make a backtest online for any of the Expert Advisors or to compare a few brokers and see which one will give you a better EA backtest. Because this way, you will know which broker gives more profits.

Thank you for reading the lecture. If you have found it beneficial, leave a comment below and if you want to get more of our free videos, make sure to subscribe to our YouTube channel.

Forex Expert Advisor Generator

Forex Expert Advisor Generator: Algo Trading for Professionals

Forex Expert Advisor Generator is all you need as a trader

Hello traders, in this lecture, I will show you how we create strategies with EA Studio. There is the Forex Expert Advisor Generator which is the best thing in the software because based on the historical data that we have imported, we can create new strategies.

We select the symbol, the period, and then we have strategy properties.

Forex Expert Advisor Generator
Historical data

We can decide here with what lot we want to create the strategies. But later, when we put the Expert Advisors on Meta Trader, we can still change the lot. And I will stick to 0.1 lot. For Stop Loss and Take Profit, we have the option to select the range.

So if I keep it from 10 to 100, it means that all strategies will have Stop Loss and Take Profit somewhere between 10 and 100 pips. It’s up to you if you want to narrow the range. But I personally prefer to give the freedom of EA Studio to create the strategies with Stop Loss and Take Profit and to combine it with different indicators, and I keep it from 10 to 100.

For the Stop Loss, I will stick to Always use, so I will have always a Stop Loss for the strategies, and as well, I will stick to Fixed. There is the option to generate strategies with trailing Stop Loss but I stick to Fixed. And as well Take Profit, I always want to have one in my strategies.

Expert Advisor Generator
Strategy properties

Preset Indicators in the Forex Expert Advisor Generator

Now, in generator settings, we have the option to select how long we want the Generator to be working. Usually, I run it for 10 hours, which is 600 minutes. But let’s give it a little bit more this time, I will give it up to 720, which is 12 hours.

Now, it’s late in the evening and I will leave it working until tomorrow, and I will see what results I have. And usually, I use it this way. I leave it in the evening and in the morning I see the results. The rest, I will leave it this way. I want to search best by Net balance, meaning that on the top, I will see the strategies with most profit.

Out of Sample is a great tool that I will explain just in the next lectures. I will not use it now. I will leave it to In Sample. And we have the option to select how many entries and how many exits we would like to have. And by default, it was 4, but I just increased it a little bit to 5.

You have the option to use preset indicators, which means that if you have a favorite indicator, let’s say MACD indicator, you can select it and add it or you can find it as well in Tools, Preset Indicators.

Generator settings

And if you add any of the indicators, for example, MACD, the Forex Expert Advisor Generator will always be part of your strategy and in every strategy you will have that indicator with that rule.

Preset indicators

Acceptance criteria is how you will get only the best Expert Advisors

It could be a different rule, MACD line crosses the zero line upward, for example. And this indicator with this rule, with these parameters that you have set, will be always in your strategies. It will be in all the strategies that the Forex Expert Advisor Generator will create.

So basically, the generator will use this indicator and will add some more, will add the Stop Loss and the Take Profit to build the strategy for you. Really cool thing but I’m not going to use it in this course and in this example of generating strategies.

So this is what the generator is about. It creates strategies based on the historical data that we have imported for the symbol, for the timeframe we want. We have the range for the Stop Loss and the Take Profit and we decide if we want to use some preset indicators or not.

And very important, at the end is the Acceptance criteria, which allows us to set some rules for the strategies or to filter the strategies that the Forex Expert Advisor Generator will show at the end in the Collection. Usually, I go with Minimum count of trades. Every time, minimum of 300 or even more, I go to 500.

 Forex Expert Advisor Generator
Common Acceptance criteria

Profit factor is a must in the Acceptance criteria

What I said in the previous lecture is that the more count of trades we have, the more robust strategy it will be. Because if we have the event of entry rule and exit rule, many times, like 500 times for these 5 years of historical data, it means that this strategy executed many trades and it’s a strategy that we can rely on.

If we have a strategy that executed just 10, 20, 50 trades for 5 years, well, we don’t really know if this will continue to repeat in the future. So the more count of trades we have, the more robust strategies we get from the Generator. And, one more time, having fewer bars with more count of trades allows us to have more active strategies.

And because I have refreshed the page from the previous lecture, I will go to Data, and Data Horizon, and I will check Use start date limit, one more time, from 15th of July, 2015. And today we are on the 15th of July, 2020. So 5 years, and this is about 31,000 bars.

Now, the other thing I put in the Acceptance criteria is the Profit factor. Profit factor is very simple and it filters the strategies very well according to me. And it’s calculated by the Net profits divided by the Net losses. Strategies with Profit factor above 1.2 are really good.

The Reactor is the next level after Forex Expert Advisor Generator

And basically, everything we have above 1 shows that the strategy is profitable. We will have more Net profit than Net losses. However, 1.2 works great for me. Now, if I press on Start, the Generator will start calculating strategies.

However, I want to add something more, and this is the Monte Carlo which is a robust tool that we have for each strategy. And before, we were doing it manually. After we have some strategies in the Collection, we were running Monte Carlo, Multi Market, or any other robust tool.

But now we have the Reactor which allows us to do the whole process automatically. So the Reactor is the Generator plus optimization and robustness options.

The reactor

So we can optimize all the strategies that are generated with full data optimization, very similar to Meta Trader optimizer but this one works much faster.

And then we have the Walk Forward optimization, a little bit more advanced tool, I’m not going into details about it. We have a lot of free videos on YouTube about this optimization. And then we have the normalization, and robustness testing is what I focus on.

Monte Carlo

And I always use the Monte Carlo. What Monte Carlo does, in simple words, it performs a variety of tests.

Monte Calro simulation
Monte Carlo

So it’s a backtest but it backtests the strategies with Randomize indicator parameters. So, for example, if we have MACD 12:26:9, it will check with 13:26:9, 14:26:9, or 12:27:9, or 12:26:10.

Basically, it will change the parameters, it will try to break the strategy. And if the strategy is still robust, it will perform well and we will see all the results here. I will show you that later when we have some strategies ready. But for the moment, I will leave it like that. Forex Expert Advisor Generator plus Monte Carlo.

And if I click on Start, you will see how it goes. All the strategies are being calculated, and those that pass the Acceptance criteria will go through the Monte Carlo. If they pass Monte Carlo, I will see them in the Collection. automatically.

This is how the Reactor works, really great because it does everything

Now, as I already said, the best thing with EA Studio is that we can run a couple of Reactors simultaneously. I will simply duplicate the top. But make sure to keep it in a separate browser so it will work faster. And if you keep it active, it will be even better.

Data Horizon

Now, I will go for EURUSD on H1 chart. And I will change the Data Horizon quickly, we set 15th of July, 2015 and it will be until today if I don’t check on Use end date limit.

 Forex Expert Advisor Generator
Data Horizon

Going back to the Reactor, what we have – strategy properties is the same.

Let’s have a look at the Acceptance criteria. Working minutes, 720 and Acceptance criteria, it has saved. Going back to the Reactor, Monte Carlo is checked, and that’s it. I’m ready to run the EURUSD. Press on Start and it starts calculating for EURUSD.

I will need to open now one more Reactor for EURGBP, but I make sure to use DukasCopy data that I have imported, and I will go for EURGBP on H1 chart. Going quickly through the Data Horizon and I will use start date limit, 15th of July, 2015.

Reactor, I just check the strategy properties, Generator settings, the Acceptance criteria. Usually it saves, but I always make one more check and then I am ready to go. Click on Start and I see it.

Run many Forex Expert Advisor Generators depending on the computer you use

Now, what I have is 3 Reactors running simultaneously. If you are doing that, make sure to follow the speed. You can see that because I have opened 3, it gets a little bit slower. But this is because I have too many tabs and browsers opened on this computer. I will make sure to close them to increase the speed.

But if it gets slower, what you can do is just to stop one of them and continue with the other 2. You can see the speed increases. Or if I stop that one as well, I will push it just on the first one. So it depends on the computer you are using. And keep in mind that EA Studio works in the browser.

So give it a try, see how it goes with 3-4. It depends again on what else you have opened on the computer. But if it gets really slow, you can just run one, and then another one, and then another one. It depends really on what machine you are using.

Now I will leave it generating strategies for 12 hours. And once I have the results, I will continue and I will share with you some more tricks about how I test the Expert Advisors before doing real trading with them.

My strategies do not perform by luck

I continue now 12 hours later with the results from the reactor in EA Studio and I have the GBPUSD as seen below. So what I have is 307,829 strategies generated. From those, just 36 passed the Acceptance criteria.

The generated strategies

Now, this is not by luck. I have tested it so many times to figure out that this Acceptance criteria that I have set of 500 count of trades as a minimum and 1.2 Profit factor works great.

And it brings me at the end nice strategies with very good equity lines and backtest statistics.

The collection

So I run the Forex Expert Advisor Generator for 10-12 hours and in the end, I have not a huge number like hundreds of strategies but I have a decent number which I would like to test.

From these 36, 26 passed the Monte Carlo validation. And for the beginners, I will quickly show what is the Monte Carlo. I will click on any of the strategies and go to Monte Carlo. You can see it below. You have different simulations for Randomize history data.

 Forex Expert Advisor Generator
The Monte Carlo

We have done here the best thing we can do with history data so I’m not testing it there. Then we have Randomize spread. As we said, I’m always putting a little bit higher spread to be more pessimistic in the backtest so I don’t need to test for Randomize spread as well.

Randomize backtest starting bar

And then, execution problems, this is only if you have some execution problems with your broker. But if you have such problems, you better change the broker because executing the trade when we do algorithmic trading is essentially important. So if you notice any problems with the execution, just look for another broker.

On the bottom is what’s most important for me, strategy variations. Randomize indicator parameters – this means that we will have different backtests. For example, this strategy has Accelerator Oscillator and Momentum. And the Oscillator doesn’t have any parameters but the Momentum has a period of 43.

So the Monte Carlo will test with period of 44, 45, different parameters. Same with the exit conditions that we have below and it will try to break the strategy.

The strategy properties

If it succeeds, the strategy will not go into the collection. So let me click on Start and you will see the results that we will have.

And one last thing, here we have Randomize backtest starting bar – this means that we will do a backtest on different starting bar which is very logical since we will be trading this strategy in the future. And we want to make sure that whenever we place it on the chart, it will be profitable.

The resolved correlations

And you can see that we have 18 out of 20 validated tests. And as validation, here we have just Minimum count of trades of 100. I keep it at the default, you really don’t need to make it any more complicated. So this is what the Monte Carlo does.

It runs variety of backtests according to the simulations we have set. So, one more time, from the 300,000 strategies, just 36 passed the Acceptance criteria of minimum 500 count of trades and 1.2 Profit factor. And then from these 36, 26 passed the Monte Carlo meaning that 10 strategies failed the Monte Carlo.

And finally, I have 25 strategies in the collection. Where is this one strategy? It was a resolved correlation. If I scroll a little bit lower, you will see Resolved correlations – 1. And again, for the beginners, the resolved correlations means that there was a strategy which was very similar to any of the other.

Either the equity line was very similar or it had similar entry or exit rules so it was removed. This way, we have 25 different strategies. Absolutely different from each other. And this is how we achieve risk diversification because we trade one asset but we trade with different strategies. We don’t expose the risk on one single strategy.

EA Studio: The fastest Forex Expert Advisor Generator

Now, let me scroll lower to show you all the strategies. They all look really good. Even if I go to the second page, it’s right here, and I go down. You will see that all of the equity lines are really nice. I will go through the third one as well, here it is.

All of the strategies are nice. And something very important, I really don’t go through each strategy to check what are the entry and exit conditions, to check the indicator chart. Of course, you can do that but with time I saw that it’s not really needed.

EA Studio has a really good Forex Expert Advisor generator and I don’t need to spend time looking into each strategy.

Now, what I need to do, I will just leave it doing nothing. As I said, for one month, I will not do anything with these collections. I will just download it.

And I have the very similar results actually for EURUSD, I have about 30 strategies there. And for EURGBP, I have about 25 I think, it’s just on my other screen. So I will download these collections and I will wait for 1 month to have the new data from the market.

EA Studio free trial: Generate as many EAs as you wish for 15 days

So what I usually do after tha, I will download it again from the Forex Historical Data App and I will recalculate the strategies to see which of these strategies performed best during this 1 month.

This is how I test the strategies recently and it works really nice. So this is how we use EA Studio to have many great strategies at the end of the collection. And don’t hesitate to give it a try. It’s absolutely free to test EA Studio. There is a free trial that you can use for 15 days and all the strategies that you export during this time are working for a lifetime.

 Forex Expert Advisor Generator
EA Studio free trial

So there is nothing to lose, there is nothing engaging. Just give it a try. It’s a great experience for every trader to practice Expert Advisors and I’m pretty sure you will like it more than manual trading because it’s less work, better results.

Thank you for watching and don’t forget to have a look at our free course as well which is available on our website at EA Forex Academy. The Forex Expert Advisor Generator might sound unbelievable, but it is very real.

That is a free lecture from the course Forex Trading with Expert Advisors + 30 best Strategies (Every Month), so if you want to get the EAs that I use, you can have them monthly with the course.