Zorro and the Brokers
Zorro needs a broker for receiving online price data and buying or selling assets. Most brokers offer free demo accounts (also called practice, paper, or game accounts) where trading can be tested without risking real money. A demo account with a broker can usually be opened in 5 minutes on their website. In most cases you'll get an MT4 account, and can start trading with Zorro's MT4 bridge. A real account for trading with real money takes longer, as the broker has to confirm your identity through some ID verification process.
Selecting a broker and account
Every broker has a different trade model and different values for spread, commission, rollover, or slippage. Many brokers offer the choice between several account types. Select the account with the smallest lot size and the highest leverage. Maybe you've read in a trading book to avoid high leverage as it implies "high risk". That's nonsense. High leverage just means that you're free to determine your own leverage. And the higher the leverage, the smaller the required margin and the greater the distance to the dreaded margin call. When trading the same number of contracts with the same budget, a low leverage account is always more likely to be wiped out than a high leverage account. Small lot sizes are preferable as you can trade with less capital and can better adjust the trade volume. For low-budget trade strategies, a micro lot or nano lot account is mandatory.
Here are the criteria for selecting the best account for Forex trading:
- Initial capital. Although you can immediately withdraw 90% of your capital once the account is opened, it is preferable to select a broker with small initial capital requirement.
- Lot size. The smaller, the better. Almost all brokers offer micro lot accounts, where 1 lot is equivalent to 1000 Forex contracts. Some offer nano lot accounts (1 lot = 100 contracts), and a few even offer a lot size of 1 contract.
- Minimum order volume. The smaller, the better. Most brokers have a minimum volume of 1 lot, but some require 10 lots or more for placing an order.
- Leverage. The higher, the better (see above). Accounts in the US have normally lower leverage than in the rest of the world. Most brokers offer about 100:1 for Forex, and 2:1 for stocks.
- Market maker / dealing desk (DD). Brokers that are no market makers have no conflict of interest and just transfer your orders to liquidity providers. If possible, select NDD accounts over DD accounts. On the other hand, some market maker brokers have a good reputation, and NDD does not guarantee no conflict of interest. NDD brokers have been found to be involved in one of their liquidity providers.
- Spread. The smaller, the better. Brokers with a dealing desk often offer lower spreads than brokers with no dealing desk.
- Commission. Obviously, low commission is better, as is a simple commission structure compared to a complex one. For comparing costs, a formula for commission -> spread conversion can be found under Commission.
Connecting Zorro to a broker
Zorro is designed to directly work with all brokers that fulfill at least one of the following requirements:
- A trading API - that's a software library with direct access to the broker's price and trading servers. The free Zorro version comes with trading API modules for several major brokers, such as Forex Capital Markets (FXCM), Oanda, and Dukascopy. More API modules are available with Zorro S. Any other broker API can be relatively easily implemented with some programming knowledge through a Broker Plugin DLL.
- Metatrader4™ (MT4) platform support. With the MT4 Bridge, Zorro can run as an Expert Advisor (EA) in MT4 and thus trade with any broker that supports this popular trading platform. This way you have several thousand brokers to choose from.
- A web based trading platform, or any trading program where trades can be placed with key strokes or mouse clicks. Zorro can control other programs by sending key or mouse commands to their user interface. In this mode, Zorro can retrieve the current price data through a broker API module from a demo account, and use the order function to hit buttons on the web based trading platform.
Simulating a certain broker and account
In backtests, Zorro can simulate any broker through asset specific parameter sets that are automatically updated from the broker API, or can alternatively be set up by script. Broker and account specific parameters, such as rollover fee, spread, lot size, pip cost, etc. are loaded from the History\AssetsFix.csv file. This file can be edited with a text editor for simulating different accounts and assets in the backtest. For details see Data Import.
Manually trading with Zorro
If your broker is not yet supported by any of the three methods above, you can trade manually by using Zorro as a signal provider. For this, run your strategy on a FXCM demo account, and enter or exit a trade with your broker when you see (or hear) that Zorro opens or closes a similar trade in its message window. If your strategy has not a too-short time frame, it won't matter when there are a few minutes delay between Zorro's and your trade entry. Zorro plays the sound file trade.wav each time when it enters a trade, and win.wav / loss.wav each time when it closes it. Those files are located in the Zorro main folder, and you can replace them with an alarm sound if you want to get alerted every time for entering a trade.
Please be aware that the trading restrictions also apply when you use Zorro not directly for trading, but only for displaying trade signals.
Running Zorro on a VPS
It has several advantages to run Zorro not at home, but on a virtual private server (VPS) hosted by a commercial service provider. You'll have a fast and reliable online connection to the broker, regardless how bad your internet is at home, and can access Zorro from anywhere. VPS are available from many providers for a small fee, such as $20 to $30 per month. It's recommended to select a large and reliable company, like 1&1 or Amazon, for hosting a trading VPS. Amazon offers its EC2™ servers even free during the first year. The setup is not totally trivial to a beginner, so we're offering a VPS installation service on the download page. If you want to do it yourself, here are the basic steps for setting up an Amazon VPS:
- Order a cloud server with Windows Server 2012 OS. You'll usually receive a server IP, a login name (normally "Administrator"), and a password from your provider. With Amazon you have to generate a public key pair for getting the password. You'll be walked through the procedure.
- Launch the server from your provider's website. When it's running, connect to the server. Under Windows, use the Remote Desktop Connection (under Accessories). Enter your access data, and a window will open where you can see the VPS desktop. It normally looks like a very empty Windows desktop. Alternatively to the Windows Remote Desktop Connection, you can install TeamViewer™ on the VPS - it's free for private use and more convenient to handle, especially for uploading or downloading files. The Windows Remote Desktop, as well as TeamViewer are also available for iPhone and Android, so you can control your VPS from anywhere.
- You can now install Zorro on the VPS. We recommend not to run the installation program, but to copy the Zorro folder directly - it's a lot faster. Start the Windows Explorer both on your PC and on the VPS. On your PC, open your User folder (or the Program Files folder if you have Zorro installed there), right click on the Zorro folder, and select Copy. On the VPS, open a folder of your choice - we recommend User/Administrator - and right click on an empty space. Select Paste. Your Zorro folder will now be copied over to the VPS.
- You can now start Zorro on the VPS, select your broker, enter your user name and password, and begin trading. Dependent on number of CPU cores and RAM on your VPS, you can trade with several Zorro instances simultaneously. Note that testing large portfolio strategies - such as Z12 - will not work on cheap VPS with little RAM. Trading uses minimal memory and will work in any case.
Make sure that the time and the time zone of the VPS is set up correctly. It does not matter which time zone - you can either use your PC's time zone, or the VPS time zone, or any other time zone - but the VPS time must be correct and match the zone. If it is wrong, Zorro will display a wrong UTC time in the server window, and strategies based on market open and close times - such as gap trading - won't work anymore. If in doubt, set the VPS to the time and time zone of your PC at home.
Running multiple Zorro instances
The free Zorro version can trade with one broker and one account only. Zorro S allows to trade several Zorro instances simultaneously with different scripts, brokers, and accounts (for details about setting up the account list, see Data Import). How many Zorro instances can run at the same time depends on the broker connection, the Internet bandwidth, and the PC resources (speed and memory). As an example, a Amazon EC2 Micro Instance - the lowest and cheapest one - can support up to 4 Zorro instances with a normal broker connection, or up to 2 with a MT4 connection.
If the parallel trading Zorros use different broker APIs, you can set the NOLOCK flag for speeding up API access. Otherwise a synchronization mechanism lets Zorro wait with accessing the broker API until other Zorros have finished their API access.
Observing your VPS trade status
It is recommended that you regularly observe Zorro's trade list, profit status, and messages on your PC or smartphone. For this let Zorro display the trade status and the message window on an Internet page. Here's the instruction for Amazon EC2 with Windows Server 2012:
- Open your VPS desktop with Windows Remote Desktop or TeamViewer, and use the Server Manager to add a new role. From the selection of roles, select "Web Server (IIS)". Windows will walk you through the setup - the default settings will do - and install the server.
- In the Amazon EC2 dashboard, select the "security group" of your instance and add a new inbound rule. Select "HTTP" with port 80. This will make your website visible to the public.
- In the zorro.ini file, edit WebFolder and set it to the web folder of your server. The default web folder of a Windows server is normally C:\inetpub\wwwroot.
- You can now visit Zorro's status pages through the public IP address of your server - for instance, by entering 98.765.43.12\Z12.htm in your browser's address field. Note that anyone else who knows this address can observe your trade success too, so you might want to add an authentication feature to the IIS web server.
Running Zorro as a trade signal provider
This is for Zorro S users only, as the free Zorro license does not permit providing trade signals. Some trade copy services such as ZuluTrade™ offer a free VPS for their signal providers. The VPS is already configured, completely with MT4, but it's a little tricky to copy Zorro onto it. Here's the procedure for ZuluTrade, step by step:
- Open a MT4 demo account with a broker of your choice (f.i. AAAFx, Zulutrade's own broker). When starting MT4, you'll get a form for adding an account; write down the login number and the password that you'll see in the MT4 welcome message. You can deinstall MT4 afterwards, as you only needed the login data. The MT4 demo account will not expire unless the broker goes broke or the account is inactive for 15 days.
- Register as a trader on ZuluTrade. On the MT4 link settings, give the login number and password from the previous step. Zulutrade will now link your trader account to the MT4 version. If that was successful, you'll get a button under your [Settings] tab for connecting to your VPS. Note that sometimes you have to wait a couple of weeks until a free VPS slot is available and the button appears.
- Click the [Connect] button to open the VPS. The VPS desktop will appear in your browser. Compress a copy of your Zorro folder to a single zip archive; strip it before from files not needed for trading, such as the content of the Log folder, or the price data files in the History folder. A stripped down Zorro archive has only a size of about 10 MB. Upload the zip file to the VPS. With Zulutrade, you can do this with the upload manager: click on the half-transparent round icon at the top of the VPS desktop, then click [Select Files] and navigate to the Zorro zip file on your PC.
- Once the archive is uploaded, open the folder on the VPS that receives uploaded files - on the ZuluTrade VPS it's the ZuluHDD folder. You can now open the archive and drag the Zorro folder inside over to the MT4 Experts folder. Zorro can run from anywhere, so it's no problem to have it in a MT4 subfolder.
- Now install the MT4 bridge on the VPS. You can now start MT4 and Zorro on the VPS, select your strategy, click [Trade] and begin generating trade signals.
When you provide signals, please play fair in the interest of your followers. Do not use martingale or similar methods, even though this might attract more followers at first. In the end, only the very few signal providers that survive more than one or two years will earn long-term trust and profits.
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