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How reliable is backtests?

Rihan
RSTrading (RSTrading)
Sep 22 2014 at 19:31
385 poster
How reliable is the MT4's strategy tester with 90% modelling quality?

CrazyTrader (CrazyTrader)
Sep 22 2014 at 22:46
1718 poster
It depends on what type of strategy you are backtesting.
- Scalping strategy is 100% useless

Rihan
RSTrading (RSTrading)
Sep 23 2014 at 06:33
385 poster
Cholipop
Sep 23 2014 at 07:02
406 poster
CrazyTrader posted:
It depends on what type of strategy you are backtesting.
- Scalping strategy is 100% useless


 Hello. Why would you say scalping strategies and backtesting is 100% useless? Such open ended statements reveals your bias towards BIAS TRADING which is investing. Scalpers make money on both sides of the coin, as investors only look to FOLLOW the trend. We see how well that worked from 1.39xx to 1.30xx on EU huh..

theHand
Sep 23 2014 at 07:08
365 poster
It's very unreliable. MT makes up the data as it goes along. You'll get a different result from running a test while online and while offline. You'll get a different result on a different processor.

It's got no use other than to see if your code is working.

Rihan
RSTrading (RSTrading)
Sep 23 2014 at 07:32
385 poster
Is there any way of doing a reliable backtest then to see how your EA will perform before going live?

theHand
Sep 23 2014 at 10:03
365 poster
Just test it. You can run as many instances of MT as you want to. I usually have about 10 going. If you have an idea code it, run it. See what happens.

Your alternative is to ditch MT and write your own systems in JAVA or C++ and go test it on Oanda's data...

Can also try something ike this: https://pepperstone.com/trading-platforms/ctrader-calgo.php

I don't know how accurate they are, but quite frankly anything will be more accurate than MT.

theHand
Sep 23 2014 at 10:03
365 poster
There's no short cuts, fx takes time, money and effort. Lots of time and effort. And money...

adrian8891 (adrian8891)
Sep 23 2014 at 11:17
696 poster
RSTrading posted:
How reliable is the MT4's strategy tester with 90% modelling quality?


Not reliable even at 1% ;)

PAMM MANAGER // Professional Fund Manager
Rihan
RSTrading (RSTrading)
Sep 23 2014 at 11:49
385 poster
I suppose you meant 'not even at 100%'?

So does that extra 9% make a huge difference. Should one rather go that route?

I know backtesting doesn't factor in stuff like spread and commission, but lets say you set the spread to a ridiculous figure and know what your commission is per trade, will that do?

What do you guys then do to get accurate backtesting?

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