Can MT4/MT5 Brokers steal Indi/EAs? | Forex Factory

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Can MT4/MT5 Brokers steal Indi/EAs?

  • #1
  • First Post: Dec 5, 2018 2:31am Dec 5, 2018 2:31am
Hello,

first of all I hope I am in the right section here.

I was just curious if a mt4/mt5 broker can steal the code of an indicator or ea no matter if its profitable or not.
I saw in Metatrader there is a "journal tab" which inform us for example when indicator or ea's get loaded/removed successfully.

Is it technically possible that brokers can steal the code/the settings of an indi/ea if I load my custom indicator on the chart?.
And therefore would be there a connection between my indicator and my broker?. Or does my broker only receive my orders?.

Thanks in advance.
  • #2
  • Dec 5, 2018 10:48am Dec 5, 2018 10:48am
Quoting Xoxoxoxo
Hello, first of all I hope I am in the right section here. I was just curious if a mt4/mt5 broker can steal the code of an indicator or ea no matter if its profitable or not. I saw in Metatrader there is a "journal tab" which inform us for example when indicator or ea's get loaded/removed successfully. Is it technically possible that brokers can steal the code/the settings of an indi/ea if I load my custom indicator on the chart?. And therefore would be there a connection between my indicator and my broker?. Or does my broker only receive my orders?....
MQL programs get compiled to encrypted bytecode before they "run" on your local client terminal. This code doesn't get uploaded to the broker, and all the broker sees is the orders generated by the program. That being said, broker servers run statistical analytics on your trades and knows if you are running an EA that is successful, and can employ counter measures to mitigate broker losses such as increasing slippage, widening spreads to trigger stops, and can even freeze the platform feed to prevent limit orders from filling at optimal prices. The real question is whether or not your code is hidden from the eyes of Metaquotes (MQ). You see, the "meta-editor" connects to several MQ APIs and could very well upload your code via backdoor and nobody would be the wiser. I'm not saying that is happening, but it's possible, and that's the risk you take by using a proprietary platform with a proprietary language.
  • #3
  • Dec 5, 2018 11:08am Dec 5, 2018 11:08am
A general recommendation:

Install an outgoing firewall and block outgoing connections from MetaTrader/MetaEditor to MetaQuotes. Only allow outgoing connections to your broker. This avoids nasty surprises from all kind of MetaQuotes activity, including market and community spam. After all you want to trade and not share your cat pictures.

Attached Image (click to enlarge)
Click to Enlarge Name: mt4-firewall.png Size: 51 KB


A good one for outgoing connections is Windows Firewall Control.

Your broker can indeed see whether or not an order is executed manually or by an expert/script. But only non-trustful brokers will use that against you and play the afore-mentioned games. If he does it's prove that he's a bucket shop, i.e. he runs a B-book against you. If you experience such tricks it's time to change.
It takes blood, sweat and enough tears to wash away the blood.
  • #4
  • Dec 6, 2018 2:40am Dec 6, 2018 2:40am
Quoting emmzett
A general recommendation: Install an outgoing firewall and block outgoing connections from MetaTrader/MetaEditor to MetaQuotes. Only allow outgoing connections to your broker. This avoids nasty surprises from all kind of MetaQuotes activity, including market and community spam. After all you want to trade and not share your cat pictures. {image} A good one for outgoing connections is Windows Firewall Control. Your broker can indeed see whether or not an order is executed manually or by an expert/script....
And your MetaTrader still works as usual after blocking the connections?.

Thanks for the recommendation.
  • #5
  • Dec 6, 2018 12:13pm Dec 6, 2018 12:13pm
Hello Emmzett and Nicholishen,

I was just randomly checking in to FF and this thread is really interesting.
Thank you for the information for both of you.
Oh the beautiful world of the brokerages! How much more wicked can it get?
  • #6
  • Dec 6, 2018 2:48pm Dec 6, 2018 2:48pm
Quoting emmzett
A general recommendation: Install an outgoing firewall and block outgoing connections from MetaTrader/MetaEditor to MetaQuotes. Only allow outgoing connections to your broker. This avoids nasty surprises from all kind of MetaQuotes activity, including market and community spam. After all you want to trade and not share your cat pictures. {image} A good one for outgoing connections is Windows Firewall Control. Your broker can indeed see whether or not an order is executed manually or by an expert/script....
Would you mind sharing a quick description of how you went about creating those rules?
  • #7
  • Dec 6, 2018 5:12pm Dec 6, 2018 5:12pm
Quoting Nicholishen
{quote} MQL programs get compiled to encrypted bytecode before they "run" on your local client terminal. This code doesn't get uploaded to the broker, and all the broker sees is the orders generated by the program. That being said, broker servers run statistical analytics on your trades and knows if you are running an EA that is successful, and can employ counter measures to mitigate broker losses such as increasing slippage, widening spreads to trigger stops, and can even freeze the platform feed to prevent limit orders from filling at optimal...
Use JForex and Java for your serious EAs/trading algorithms.
  • #8
  • Edited 5:40pm Dec 6, 2018 5:24pm | Edited 5:40pm
Quoting Nicholishen
{quote} Would you mind sharing a quick description of how you went about creating those rules?
First, "Windows Firewall Control" is a program which lets you block network connections on a program level (for one or more specific or for any program). So I can block access to mql5.com for MetaTrader but the browser still can access that domain. Second, the default mode of "Windows Firewall Control" is to give an alarm (sound and popup) as soon as a program tries to connect to a domain not matched by any former rule. One can start with that mode to create rules, even if all domains/IPs are unknown.

There are two tools I use to create the rules from.

  1. DNSQuerySniffer: It shows you which domain names a program looks up before it can connect to it. No program can circumvent DNS because hardcoded IPs make any program quickly unusable. This way you can find and block all the domains MetaTrader wants to connect to to load spam into the terminal. Side effect: empty market tab without spam, empty signals, empty codebase without spam. The result which I use to create the blocking rules is something this:

    [code]# MetaQuotes

    127.0.0.0 content.mql5cdn.com geo.cdn.metaquotes.net updates.cdn.metaquotes.net updates.metaquotes.net
    127.0.0.0 1.cdn.metaquotes.net 2.cdn.metaquotes.net 3.cdn.metaquotes.net 4.cdn.metaquotes.net 5.cdn.metaquotes.net
    127.0.0.0 6.cdn.metaquotes.net 7.cdn.metaquotes.net a1-51.clients.cdn13.com
    127.0.0.0 _download.mql5.com stat.mql5.com storage.mql5.com
    127.0.0.0 api1.mql5.com api2.mql5.com api3.mql5.com api4.mql5.com api5.mql5.com
    127.0.0.0 api6.mql5.com api7.mql5.com api8.mql5.com api9.mql5.com api10.mql5.com
    127.0.0.0 api11.mql5.com api12.mql5.com api13.mql5.com api14.mql5.com api15.mql5.com
    127.0.0.0 api16.mql5.com api17.mql5.com api18.mql5.com api19.mql5.com api20.mql5.com
    127.0.0.0 api21.mql5.com api22.mql5.com api23.mql5.com api24.mql5.com api25.mql5.com
    127.0.0.0 api26.mql5.com api27.mql5.com api28.mql5.com api29.mql5.com api30.mql5.com
    [/code]
    Attached Image (click to enlarge)
    Click to Enlarge Name: dnsquerysniffer.png Size: 26 KB

    One doesn't have to overwrite the DNS resolution with invalid local IPs as I did but it makes life easier. One can as well enter the single IPs of the related subnets into a block rule. My block rules from the screenshot (everything in red) block everything else "on top" of the known domains.
    The above list is an excerpt from my "C:\Windows\System32\drivers\etc\hosts".

  2. The log function of Windows Firewall Control itself, I use it for creating the "allowed" rules. First I disable the firewall, start the terminal and connect to an account. Then I switch the firewall to strict blocking mode and select in the server selection context menu one available server after another. The terminal will try to connect to the servers but will fail. This failed connection attempts show up in the log of blocked outgoing connections (without having an alert for each one). From there I read the IPs the broker currently uses/owns. Good brokers will have many servers but you always rent IPs from a provider on a subnet level, you never rent a single IP. So if the trade server's IP for example is 45.32.60.23 I enable access to the whole subnet as 45.32.60.0/24. This subnet may or may not be completely owned by the broker, but if he owns at least one IP the other IPs will never be owned by MetaQuotes. I also restrict connections to port 443, Chinese servers sometimes use different ports in an attempt to circumvent government firewalls.

  3. The process of checking the broker for new trade servers needs to be repeated regularily (every few months) as brokers may add new/more servers. You don't have to do it once a weeks or so. Usually I check the displayed ping and recheck servers every 3-4 months and then update the rules. That's by far enough. However if I run into sudden connection problems my first look goes to the firewall log. Happens once every second year.

Here are the current allowed subnets for Global Prime and IC Markets. As can be seen IC Markets invested a lot of resources after the outage caused by the DDOS attack of its competitors 2 years ago.

Inserted Code
[Global Prime]
Demo: 443      74.217.165.68
Live: 443      38.76.4.99,162.255.145.184,185.97.161.9,208.118.225.217
 
[IC Markets]
Ports: 443,444,446,448,449
 
IPs: 5.149.251.0/24,
     5.196.163.0/24,
     38.76.4.0/24,
     38.132.119.0/24,
     45.32.1.0/24,
     45.32.15.0/24,
     45.32.37.0/24,
     45.32.49.0/24,
     45.32.53.0/24,
     45.32.60.0/24,
     45.32.71.0/24,
     45.32.74.0/24,
     45.32.75.0/24,
     45.32.90.0/24,
     45.32.177.0/24,
     45.43.5.0/24,
     45.63.96.0/24,
     45.76.9.0/24,
     45.76.23.0/24,
     45.76.64.0/24,
     45.76.135.0/24,
     45.77.216.0/24,
     46.165.217.0/24,
     47.89.179.0/24,
     47.89.180.0/24,
     47.89.181.0/24,
     47.89.182.0/24,
     47.89.189.0/24,
     47.90.0.0/24,
     47.90.3.0/24,
     51.254.68.0/24,
     52.21.42.0/24,
     52.23.90.0/24,
     54.179.142.0/24,
     63.237.111.0/24,
     69.39.236.0/24,
     69.65.41.0/24,
     78.140.180.0/24,
     87.239.190.0/24,
     98.158.100.0/24,
     98.158.106.0/24,
     98.158.107.0/24,
     98.158.96.0/24,
     98.158.99.0/24,
     103.6.130.0/24,
     103.23.168.0/24,
     103.242.72.0/24,
     103.242.74.0/24,
     103.242.75.0/24,
     104.207.133.0/24,
     104.207.134.0/24,
     104.207.135.0/24,
     104.238.170.0/24,
     107.191.41.0/24,
     108.61.173.0/24,
     108.61.174.0/24,
     108.61.181.0/24,
     118.193.141.0/24,
     118.193.185.0/24,
     119.29.102.0/24,
     120.25.100.0/24,
     123.56.121.0/24,
     139.196.29.0/24,
     149.56.39.0/24,
     151.80.25.0/24,
     162.255.145.0/24,
     169.239.181.0/24,
     170.75.200.0/24,
     170.75.202.0/24,
     176.56.170.0/24,
     176.56.180.0/24,
     176.56.184.0/24,
     176.56.185.0/24,
     183.60.86.0/24,
     183.131.212.0/24,
     185.65.173.0/24,
     185.96.245.0/24,
     185.96.247.0/24,
     192.81.110.0/24,
     192.99.47.0/24,
     195.189.123.0/24,
     198.50.218.0/24,
     199.247.23.0/24,
     200.46.13.0/24,
     208.100.57.0/24,
     208.118.225.0/24,
     208.118.232.0/24,
     211.149.168.0/24,
     216.93.244.0/24
It takes blood, sweat and enough tears to wash away the blood.
  • #9
  • Dec 6, 2018 5:56pm Dec 6, 2018 5:56pm
Quoting Xoxoxoxo
{quote} And your MetaTrader still works as usual after blocking the connections?. Thanks for the recommendation.
Via 3G from my mobile:

Attached Image (click to enlarge)
Click to Enlarge Name: firewall.png Size: 28 KB
It takes blood, sweat and enough tears to wash away the blood.
  • #10
  • Dec 6, 2018 11:45pm Dec 6, 2018 11:45pm
Quoting Macdon
{quote}Use JForex and Java for your serious EAs/trading algorithms.
Thanks for the opinion. Can you explain a bit more why jforex would be better for automatic trading than mt4/5,ctrader etc. I am curious, of course mt4 performance is not satisfactory from my personal view. I just read about jforex & seems pretty impressive. Seems only one broker does offer that, correct me if I am wrong. Does jforex guarantee Stoploss? If you have tested in jforex platform, how effective it is in comparison with other platforms.

Would love to hear from you or anyone who had experience.

Best Regards.
How big can you think!
  • #11
  • Dec 7, 2018 9:44am Dec 7, 2018 9:44am
Quoting emmzett
{quote} First, "Windows Firewall Control" is a program which lets you block network connections on a program level (for one or more specific or for any program). So I can block access to mql5.com for MetaTrader but the browser still can access that domain. Second,...
Thanks for the description.

I will definitely take a look at this.
  • #12
  • Dec 7, 2018 5:10pm Dec 7, 2018 5:10pm
Quoting Xoxoxoxo
Hello, first of all I hope I am in the right section here. I was just curious if a mt4/mt5 broker can steal the code of an indicator or ea no matter if its profitable or not. I saw in Metatrader there is a "journal tab" which inform us for example when indicator or ea's get loaded/removed successfully. Is it technically possible that brokers can steal the code/the settings of an indi/ea if I load my custom indicator on the chart?. And therefore would be there a connection between my indicator and my broker?. Or does my broker only receive my orders?....
Terminal doesn't send your indicators or EAs, so if your system is not infected by virus or trojan you're safe.
  • #13
  • Dec 9, 2018 3:37pm Dec 9, 2018 3:37pm
Quoting Nicholishen
...can employ counter measures to mitigate broker losses such as increasing slippage, widening spreads to trigger stops, and can even freeze the platform feed to prevent limit orders from filling at optimal prices...
@Nicholishen -- a few days ago you commented about how brokers could manipulate the data feed in order to mitigate losses. If you don't mind, I had a couple of follow-up questions:

1. Is there only one data feed? That is, do all clients receive the same data -- or can the data be "tailored" to each client depending on how big a risk each client poses to the broker?

2. Related to (1) -- would counter measures be employed against all accounts and data feeds -- or just the ones posing the greatest risks?

Since each broker will have a mix of buys and sells (I'm assuming roughly 50/50 -- though, perhaps that's wrong), and assuming there is only one data feed for all clients, then wouldn't it be the case when data is manipulated some clients would benefit while others would be harmed? Do you know what I mean?

Thanks...
  • #14
  • Edited 7:29pm Dec 9, 2018 7:19pm | Edited 7:29pm
Quoting robots4me
...1. Is there only one data feed? That is, do all clients receive the same data -- or can the data be "tailored" to each client...
...2. would counter measures be employed against all accounts and data feeds -- or just the ones posing the greatest risks?
May I give you a few ideas (as I'm not Nick)...

You have bucket shops and brokerage companies targeting more wealthy customers. The average opening balance with bucket shops is around $500 and less. This is important. Retail brokers targeting small retail clients are almost always bucket shops. When you open an account they put you by default in the B book. All clients in the B book are connected to one data feed. Clients with more money usually are connected to a different feed. Now the broker watches you. Not *you* explicitely but he watches everyone in the B book. As long as the client loses everything is fine.

If a client starts winning things change. As soon as your winning becomes regular and the won amounts increase a broker with "some" ethics will take you out of the B book and connect you to the regular feed. He will not tell you and you will not immediately notice. But from this point on forward your execution starts to worsen. Suddenly you will notice delays or increased slippage. In general your trading costs (first and foremost slippage) rises. This is because now your trades are not matched against the B book anymore but go to the brokers liquidity provider. This process takes more time than matching a B book, and this additional time causes delay and the increased slippage. If you stop winning regularily and lose again or if your balance drops under a specific level (say 2k) he will put you back into the B book without notice.

However a broker without ethics (the majority of bucket shops) will not connect you to the real market but will start playing chicken games with you until you give up or lost everything. This is where long delays, froozen terminals and stop hunting come into play. The broker can manipulate your specific feed if he wants to. He can do this by injecting misquotes only into your feed, and thus triggering your SL for example.or delaying only your feed. Or causing permanent requotes in only your feed. No other user will see what you see. There is a software for this sold by MetaQuotes to the broker (it's called Virtual Dealer plugin) and this software is so bad that regulated brokers are not allowed to use it anymore (the got sued by clients and regulators). However there are still enough unregulated brokers and you never know what those brokers do with you. Another trick often applied to clients who constantly over-leverage is to increase the required margin without notice in a moment when the client is close to a margin stopout. Read the fine print in the terms and conditions, usually the broker is allowed to change margin requirements without former announcement. So by the law this trick is considered legal. By the law?

That's why the first and most important rule: Never chose a broker with fixed spread or without commission. He will always, always, always act against you - in one way or another. Chose a broker with commission and the broker will do everything to keep you happy and in business as he earns from the commission you pay and not from the games he plays with you. It's called "conflict of interest" and your first task in trading is to avoid it.

MetaTrader Virtual Dealer Plugin - User Guide
It takes blood, sweat and enough tears to wash away the blood.
  • #15
  • Edited 8:44pm Dec 9, 2018 8:12pm | Edited 8:44pm
Quoting emmzett
May I give you a few ideas
@emmzett -- super, super response. I just learned more from your post than from searching and Googling the past couple of years. This is all very interesting. I need to chew on it for awhile. I'm not sure exactly how this will affect my trading decisions -- as a US client my choice of brokers is very limited. I mostly trade portfolios of EAs, so I do have accounts with non-US brokers -- mostly located on exotic islands I've never heard of or in ex-Soviet republics.

Your advice about commissions is most helpful. I just now checked and my non-US brokers DO charge commissions -- so, that's a good sign. However, my US broker (OANDA) does not -- hmmmm...

Thank you so much -- you are a gentleman and a scholar...
  • #16
  • Dec 10, 2018 4:20am Dec 10, 2018 4:20am
Quoting robots4me
{quote} ...Your advice about commissions is most helpful. I just now checked and my non-US brokers DO charge commissions -- so, that's a good sign. However, my US broker (OANDA) does not...
Yep, the States are difficult today. Many chose Oanda or FXCM and consider them one of the best. 10 years ago I started my Forex journey at FXCM. Despite its good reputation they got sued for bucket shop practices and I was one of the clients who got a refund of almost 100 bucks for manipulated execution. They decided to counteract more claims by voluntarily refunding a small amount to all affected accounts.

About Oanda, 10 years ago they used bucket shop practices, too. They had this limitation that you could only execute trades at "half pips" (1.2010'0, 1.2010'5, 1.2011'0, 1.2011'5 and so on) and not at every subpip. Allowing execution only at "half pips" is a 100% proof for a bucket shop, guess where all the subpips are going... I don't know if they changed over the years, and if they offer honest Forex accounts today.

But let's also talk about the good. There you have MetaTrader brokers offering transaction receipts for each single trade (including minilots). A receipt confirming the execution in the real market and naming the exact counterparty (the liquidity provider) who executed your trade. At the moment I know only of Global Prime offering this. But LMAX London running its own Forex exchange, Dukascopy and of course IC Markets are other good ones.

Look for a brokers offering a FIX api to their liquidity providers. Even if you will never use it as a retail trader, the fact that your broker invests money into such a infrastructure shows that he's interested in serious money and proves his stand more then any marketing statement.
It takes blood, sweat and enough tears to wash away the blood.
  • #17
  • Edited 6:19am Dec 10, 2018 5:45am | Edited 6:19am
What to do if your are stuck with US brokers?

- Look for the most reliable one you can find (preferrable with commission) and focus on swing or longer term trading.
- Look for a profit target of at least 30 pip and a holding period of 1-2 hours or more.
- Never try to scalp for a few pips. The broker will make more money with you then you with your strategy.
- If you can automate and run a portfolio of swing/longer term strategies in parallel.

The broker will make his cut by taking a part of your slippage. So, adjust your profit targets to a size where slippage of 1-2 pip cannot harm you. This only works if your targets are considerably high. If you want to increase overall returns add more strategies to your portfolio.

The above assumes that the broker lets you make money at all/in the long run. Chose wisely.

PS: No broker will ever steal your EAs/indies. 95-99% of failing retail traders also means that all those codes are crap. If a broker is interested in your trading style he will approach you directly. Serious brokers watch your style and always have access to OPM. If you are good they want "you", not your EA.
It takes blood, sweat and enough tears to wash away the blood.
  • #18
  • Dec 10, 2018 8:34am Dec 10, 2018 8:34am
Quoting @emmzett
What to do if your are stuck with US brokers?
@emmzett -- your posts answer so many questions that have been bubbling in the back of my mind. With this information I have a much better picture of the forex landscape. This thread is worth way more than my price of admission to FF

Again -- thank you, @emmzett.
  • #19
  • Dec 10, 2018 9:13am Dec 10, 2018 9:13am
emmzett, great knowledge...

I am in US and trade substantial capital with Oanda. I trade breakouts on hourly bars. I am profitable. I pay no commissions.

I have noticed that at times my SL is grabbed within 0.5 - 1 pip and then price returns in the "correct" direction.

How likely is that Oanda, the largest US Forex provider is a bucket shop and can adjust their execution per individual trader?

If you can, please look closer at Oanda and be specific in your thoughts.

https://www.oanda.com/
  • #20
  • Edited 12:05pm Dec 10, 2018 10:49am | Edited 12:05pm
Quoting driven18
...I pay no commissions...
It's not a question of likely or not. If you don't pay commission your orders go into a B book, that's a fact. Do you think the broker works for you for free? Ask him to change your account to a feed where you pay commission and see what their answer this.

An American court doesn't sentence the then biggest retail Forex broker because of "likelyness".

Please understand that I don't want this thread to turn into a broker bashing. All I'm telling is how the business works. Due diligence and decision making need to be done by everyone him/herself.
It takes blood, sweat and enough tears to wash away the blood.
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