Lets Automate a Simple Renko Strategy!

Optimized input settings for Version 2.60
MA Method: Linear Weighted
Slow MA Period: 30
1% Free Margin per trade.

Looks very good. Thank you for the update, much appreciated. Finally got everything up and running for backtesting and forward testing ( did not know about the need to uncheck "Offline Chart" in the Offline Chart to be able to trade ).

Uncheck that option, it is necessary for the EA to receive ticks from the platform...

Could you share how you backtest this with no mismatched errors? Thanks so much, Lee

Yes, can share tomorrow. Bedtime at my place.

Ok, lets start. I will describe the process to get up and running for the Math Trader 7 EA here. Both for live execution ( demo or real account ) and backtesting.

Before we start a few words to our technical environment. We are using MetaTrader 4 Terminals here. MetaTrader 4 is a very popular component, provided by brokers to give their clients a powerful tool for trading. The standard functionality can be extended by custom components written in the program language MQL4. MQL4 is a program language which has a lot of similarities with the program languages C, C++, C#, Java, Python or Unix Shell scripts to name a few, so programmers knowing one of those languages already should be able to code MQL4 custom components without running into big issues. Documentation about Metatrader 4 and MQL4 is available online for all who want to know more about that.

The Metatrader 4 custom components can be divided into 3 groups. Expert Advisors ( EA's ), Indicators and Scripts. Every group covers different purposes.

- EA's offer trading functionality. When a program should be able to trade, it must be an EA.
- Indicators are used to analyze charts. The results of the analyzes can be displayed as objects like lines, boxes, arrows, etc. EA's can read indicator data in case they need to.
- Scripts are ment to run once, not in a loop like EA's or indicators do.

The for humans readable ( and changeable ) code file ends with .mq4. A compiled code file ( readable from MetaTrader 4 only and not changeable ) ends with .ex4. Every code file must be stored in it's specific directory, depending whether it is an EA, an indicator or a script.

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About one year ago there was a big Metatrader 4 change, the so-called Build 600. Main intention of this change was to bring Metatrader 4 and Metatrader 5 together, with improved functionality. However, there was a price to pay. The Metatrader 4 program codes were impacted by the new version and a lot of EA's, indicators or scripts needed to be modified to work with Metatrader 4 Build 600 again. However, the now "old", already compiled .ex4 files could still be used and run in a "backward compatibility mode" since then. The location of the Metatrader 4 files changed as well.

Here we will cover everything we need for newer Metatrader installations only, in particular releases after the Metatrader 4 Build 600 change.

Step 1 - Configuring Metatrader 4 to allow EA's to trade

Before we install anything on the Windows PC ( i will cover only Windows installations here ) we must permit Metatrader 4 to perform trades executed by EA's. The needed Settings are considered as a security risk, you can read about warnings all over the place. Anyway, if we want that EA's can trade we have no choice and go ahead.

- Open your Metatrader
- Select Extras, in Extras select Options ( the names can be different on your PC, I have a Metatrader installation in german language and try to translate as good as possible )
- Select Expert Advisors
- In Expert Advisors, check at least the boxes "Allow automated trading" and "Import of DLL ..."
- Save these Settings

We are done with Step 1 and don't need to do this again in case we will install other EA's in the future. Metatrader 4 is now configured for automated EA trading.

Step 2 - Create Renko ( live ) Charts

Metatrader 4 comes with a set of Timeframes for Charts. We all know them and look at them when we select M1, M5, M15, M30, H1, etc. Those Timeframes show us price data generated in minutes, hours, days, weeks and so on. Renko Bricks are timeless, only the Price counts. A new Renko Bar is created once the price moved up or down a certain value ( the so-called Brick size ). We don't know in a Renko Chart whether the price has moved fast or slow, one bar looks like the other and overall, everything looks smooth.

Metatrader 4 does not support Renko Bricks "Out of the Box". So we need to find something to add this functionality.

There are quite some Renko Brick Solutions out there, some are paid versions, some are free, some EA's, some Indicators, some mq4 and some ex4 files. A few weeks ago I searched for a Renko Builder for myself, so I know. I ended up with an EA called "renkolivecharts_pimped_v4_13", which is free, the mq4 file was available and most important, it worked. It is a quite "old" EA, and a few programmers worked on it already to improve functionality. However, the code was hard to read and it had a bug. Having some programming skills, I restuctured and optimized the code, removed the bug, added some functionality and compiled it on the most recent MetaTrader 4 Build. As it turned out later, the EA "Renko_Mod.mq4" in posting #1 is one of the old versions around along with "renkolivecharts_pimped_v4_13" on which I started to work on. As the work is already done and I believe the Renko Live Chart EA truely improved, we will install the new version here. It's named EA_RMLiveCharts_v5_01.mq4.

As EA_RMLiveCharts_v5_01.mq4 is an EA, we need to copy it into our Experts folder. You can open this folder from the Metatrader 4 application.

- Select File
- Select Open Folder
- Select the directory MQL4
- Select the directory Experts

and copy the file into this folder. When done, double-click on the file Name in the Experts folder. A editor will open and show you the source code of the Renko Builder EA. Here is not much to do, the .mq4 is pre-configured to use 10 pips brick size and auto-adjust the bricks to round numbers. However, if you want to change any of the Default Settings permanently, here is the right place to do.

- Compile the file and restart Metatrader 4

Open a new Chart, e.g. EURUSD. After the Chart opened, make sure you selected M1 as the Time Frame. We do this to get the most accurate data for our Renko Bricks. Now open Navigator and scroll down until you see the EA_RMLiveCharts_v5_01 EA. Drag this file into the EURUSD M1 Chart. A dialogue will open, where you can change the settings according to your needs. When done, close the dialogue and the EA will run on the EURUSD M1 Chart.

Now we open the Renko Chart. Depending on the Time Frame you selected for your Renko Chart ( default is 2 ) the name will vary.

- Select File
- Select Open Offline Chart
- Double-Click on EURUSD,M2 ( for this example )

A new Chart will open and show you the Renko Bricks. In this Chart, open "Properties" and UNCHECK the "Offline Chart" checkbox. We need this that the Math Trader 7 EA is able to trade from the Offline Renko Chart. You also can change other properties here or attach indicators to the Renko Chart. There is no need to refresh the Renko Bricks or whatever, the Renko Live Chart will mirror every tick received on the M1 Chart. As for the Renko Setup, we are done.

Step 3 - Attach the Math Trader 7 EA to the Renko Chart

Look in this thread to find the most recent version of the Math Trader 7 Renko EA. At the moment I am typing this text it is version 2.60. You will not find a .mq4 file, you will find a .ex4 file which is fine. The difference is that the file is already compiled and you are not able to view or change it. Also make sure your Metatrader 4 installation is updated, when you use an older installation than Math Trader 7 recommends, you might face problems. Download the Math Trader 7 Renko EA.

Copy the Math Trader 7 Renko EA to your Metatrader 4 Experts folder and restart Metatrader 4.

Make sure you are logged in to your demo account and everything is up and running like described in Step 1 and Step 2. The MathTrader 7 EA will start trading with the settings you have configured and it might be a good idea to get some experience with the EA before you run it on a live account.

Open Navigator and scroll down to the Math Trader 7 Renko EA. Drag this file to your Renko ( "Offline" ) Chart. A dialogue box will open and you can set your preferred trading parameters here. When finished, close the dialogue and the Math Trader 7 Renko EA will start to work.

We are live now !

Step 4 - Setting up the Backtesting Environment

The tool in Metatrader 4 for backtesting is called Strategy Tester. It supports backtesting ONE EA in ONE timeframe. So, if we look at this we encounter already 2 problems in the last short sentence.

I am sure that there are a lot of solutions to this out there, some may be free, some may be paid. I am not a superhero in backtesting, I just got adviced from member blueseahorse how we can deal with this for this specific case and it works. Considering that we just want to backtest NOW, I provide instructions what we can do, not saying it is a preferred / good / easy soution. I hope you can understand.

First, we need to download 2 technical components for our mission. We can find them in posting #561 of this thread, provided by member blueseahorse. Again, thanks a lot to him for the solution.

- Download RenkoBar.ex4. It is an indicator and goes to our Metatrader 4 Indicators directory
- Download OffLineTestHelper.ex4. It is a script and goes to our Metatrader 4 Scripts Directory

Start MetaTrader 4 and close all running Charts.

- Open a new EURUSD online Chart. Make sure you use the M1 Timeframe for this Chart.
- Open Metatrader 4 Navigator and scroll down until you see the RenkoBar.ex4 indicator. Drag the indicator to the Chart. A dialogue box opens and we select the input tab. For EURUSD, 10 points are 1 pip. So, if you want to generate a 10 pips offline file, use 100 points, for 5 pips 50 points, etc. Use M4 for the Output Timeframe. Enter a high value for the number of bricks to be generated, e.g. 500000 and close the dialogue. The indicator starts to run and opens a new dialogue in the Chart window. Click on M4 to check if you got what you expected.
- Close the EURUSD M1 Chart and EURUSD M4 Chart.

At this point we have generated a new EURUSD,M4 Renko Chart history file with our defined Renko Brick size for further use in our test environment preparation.

- Open the new EURUSD, M4 Chart as an offline Chart ( File, Open Offline Chart ).
- From Navigator, drag the script OfflineTestHelper to the Offline Chart. A dialogue box opens and we can set the test Server Name in the Input tab here. We enter M7test and close the dialogue. Another dialogue opens and informs us that we successfully generated a test environment M7test. We click "No", we don't want to restart Metatrader 4 and exit the script.
- Close the open EURUSD,M4 offline Chart

We have created our test environment now ( the script OfflineTestHelper did this for us ). It created a new subdirectory with all needed files for the Metatrader 4 Strategy Tester and named the former EURUSD M4 file EURUSD1 in there, containing the Renko Bricks and ready for backtesting.

Mission accomplished

Step 5 - Backtesting

Testing is now pretty straight forward. We login to our new created "Test Server". For this, we use the Metatrader 4 "Login to Trade Account" function. For the Server Name we type M7test, we can use the login and password from the demo account. I did not check if login and password is really needed.

- Open Strategy Tester
- For the EA, select the Math Trader 7 EA
- Symbol is EURUSD
- Timeframe is M1

Backtest. You should not encounter any problems.

GL and have a nice day,
V.

Hey MathTrader, thank you for sharing your ea and your time. I have been doing backtesting myself and the numbers you get for lets say a week are amazing. 50-100% up or more? I have had similar results with several ea's based on renko, but when you try forward testing, it shows a very different picture.
All that I am saying is that backtesting any renko is completely unreliable, even if you use 99% modeling quality data. I will forward test the 2.60 next week and I hope that I am wrong, because then we can make a million $ in a snap. ;-)

Best, Josh

You're welcome! :-)

The backtest is not for one week, it is for one year! I use my own Renko Chart builder from real ticks that labels each Renko candle to be like it is a 1 minute chart.

Yes thanks for your hard work, any chance of sharing the method you use for testing with real ticks?

Thanks Verified, look forwards to it.

Hey. I was looking at the test you posted in the previous page. Sorry, i didnt know the way your chart works.
Keep on truckin :-)
Best, Josh

Well well

on running up MT4 (this one from GoMarkets), the results are not at the rendez-vous

those tests are made in live on EJ and EU
I tried renkobarSize = 10 and for the second half renkoBarSize = 5

Joshua , we got only from MathTrader7 an .ex4 file, not the MQ4L code
so, I put the MathTrader7RebkoEA on a live account (MT4 from Go Markets)
and the results are not at the rdv, as expected and show in the backtests
This happened very often for quite all EAs. There got a different behavior once running up on a live account.

there is a difference between knowing the path and walking on the path (Morpheus to Neo => Matrix)

hi peter

i use the original one, and my brick size is 5 pips, trailing stop is 7, test on a ECN broker

i will try different settings to see if problem still exist or not

Hello,

When I opened the offline chart I have only two bars. Someone can help me please?

Regards,