6 months is not enough testing period. You need to be thinking in terms of years.
With your current MM settings, your loss trades (as few as they are) = 2x profit. It should be the other way around. But that's me being picky, a ~90% win rate would cancel that out....if indeed you could maintain that high probability in real trading......
@ jpbiznes - as a few people have said, you've got to run it for years. The more the merrier. A curve fit model is easier to work on a shorter period. Try to see the results in as many market conditions and cycles as possible.
@ Raiden - That is common and for your backtests we normally employ something like this: mt4i.com/spreadcontroller.aspx and set it to a value a tad higher than the statistical highs of the spread. Performance is reduced naturally, but you get a more realistic picture as slippage does occur in live trading.
@rob559 - every serious trader and quant I know backtests. To say that it has no value is beyond ridiculous. It shows you that the model is working as you want it to and if it's a viable model to even consider wasting time and resources testing. Almost every system (and not just MT4/5 here) I've EVER seen usually goes:
development > backtesting > adjustments > backtesting > demo testing > live testing > live
Backtesting, while not a necessarily accurate measure of future performance, plays a key role in designing systems. I think a lot of people got wrapped up in fact that the inherent design flaws in the MT3 and 4 back testers skewed results so, that they've disregarded it. That's just not the case in the world outside of Metatrader and while MT4/5 backtests aren't the best, they're OK if the data you feed them is good. Dukascopy tick data is about the best solution for MT4 backtests. Any backtest is only as good as the data you feed it.
Just in case it is construed as such, I did not mean to imply the TC, jpbiznes, is out to deceive anyone, I meant it in the context of not deceiving ourselves when we backtest.
@ McLean Can Cleve - Thanks for the link, it is a much cleaner and hassle-free method than editing the symbols.sel file. And I completely agree that backtesting is a critical step in designing a system. A backtest report that I don't do myself, however, I can't trust at face value. Simply because it is too easy to fabricate excellent results. rob559 might be saying that.
Sure, you can curve fit the hell out of a dataset, but it becomes increasingly hard over time and in varying market conditions. Hence a longer backtest. This is precisely why you get these EA sellers that do a backtests on a year by year basis. The same inputs wouldn't have worked throughout all of the years in the test and while it's not a bad thing to re-optimize your strategies for current conditions, we don't know what they are in advance and these guys naturally know what the market conditions were like in 2006 and they engineer the backtests to do the best for that timeframe.
So yeah.. I'm totally agreeing with you, just expanding a bit.
Backtesting is the first step in creating a good ea but as Splexin said you need to test it on a larger timeframe. Once that is done you will want to forward test it on a demo account. If that works then move to a live account to test.
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