Hello guys
I have been working on my own system ,and made a backtest for 2014 and 2015 on the eurusd. Is a trend following system, so as you can see on the chart it performs better when the markets are trending, and when is in range it doesnt have too big drawdown (basically stays at breakeven and my equity curve goes up)
Trades: 300
Profit factor: 4.57
increase account: 218%
drawdown: 14%
I know is small sample, but it has a chance to make it to the long haul?
I woukld aprectiate your opinions
thanks
Hi,
- If you have not used optimization (always a bad thing in the strategy tester), you could try to back test on more data (5-10 years).
- How reliable is your back testing data? Is it just the brokers data? If tested on anything below daily (or even weekly) charts odds are that your data is not complete over a 1-2 year testing. This can have significant effects on your overall result.
- Is your system prepared for the unexpected? (e.g. something like world war 3, a atom bomb drops in the US and the EURUSD shoots up over a 1000 pips in a matter of a few ticks, while your EA is in a short position)
- How does your system fit in your strategy and overall trading plan?
- How is your money management? As your figure shows your position size is larger over the first 90 trades compared to the last 90 trades. This does not match up with “normal decent” money manegement strategies (e.g. fixed%balance risk per trade).
Lot of open questions.
But most important: if you can comfortably answer all of them with a decent answer (to yourself, you don’t have to share your holy grail details), you will need to test it in live market conditions. Let your EA run for 6 months in a demo account (e.g. on a private server). If it still performs as in the back test, then start with a small live account, monitor it for another 6 months and if that also performs as expected, then you can slowly add more capital to your account (of course never use money you cannot afford to lose).
Good luck !
