Good or bad?

Beginner Questions
1

Ppl, who have read my last threads might know that I work as a software engineer.
I have trying a scalping strategy using the Elliot waves. Every uptrend and downtrend has this wave formation. So, we look to enter the market correction or 2nd wave, using a 10 pip S/L and 5 TP. A tiny-winy profit but this was to test whether this would work or not. There were instances wherein I got out of the market too early where I could have ridden the wave to make a killing. So, one of my friends a expert in C++ ( MQL is nuthing but C++) helped we write a programatic strategy for this.
I ran the EA(or the program) on a 1 year test with deposit as 5000.

EA made a huge number of trades within a day, most likely 20-30 a day.

For the timeframe for 01-01-2008 to 31-12-2008, the 5000 grew into 600,000.

So, a backtest says profits could have been 12 fold.

But, there was a catch in the result. Guess what it was?

The EA made 1.7 million from 5000 for last year and for the same period lost a whopping 1.1 million.

So, Intial Deposit = 5000
Profit = 1700000
Loss = 1100000
Gross = 0600000

So, ppl what would you say? Is this kind of result good?

2

well, it makes more than it loses, so by definition its a good system so congrats on that !

now elliot waves are not my cup of tea as even the most expert at using them consider it more art than science and i guess i have to allow for THEIR expertise.

looking over the results, they are quite substantial for the time involved but you also MUST consider that backtesting is NOT the end all and be all of testing, whereas FORWARD testing is pretty much the way to go.

back testing takes into NO account the slippage you get from trying a market entrance or exit and with the number of trades the EA performs, that could end up being a substantial amount (and of course it could be positive or negative, but i would bet more negative than positive)

looking at the results, it doesnt come near my own scalping results, which are actually 100% to the good as of this moment (although a word of explanation is due — im NOT always THAT GOOD !) For ME, since i trade with the trend, i simply let a “missed” trade alone (i dont call them BAD) and that scalp has now become a “swing” trade, and if its with the trend, it will pay off within hours or a day, so i will never throw away a trade unless i can see that there is NO hope that it will ever come home to roost (lets say i bought high and the current daily trend is DOWN, and nothing will change it for months – then i scale out of the loser 0.01 lots at a time, till im done with it)

so while your results LOOK highly impressive, theyre based on backtesting and have not been placed under fire ---- do that and tell us how its doing cause you may have come up with something decent !

enjoy and trade well

mp

[B]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !!
[/B]

3

Yeah mp, got the taste of the real world scenario today. My ISP went down without notice in the closing session on friday. :mad:
The EA executed three orders, just before the ISP problem and with the EA running, it would have made a killing, making more than 600 bucks on a 500 bucks account.
But, that wasnt to be, my ISP going down, got me to roll over the trades from friday to monday and the prices opened on in a losing positions of 300 bucks. :frowning:

On the other hand: I backtested the EA even more. Surprisingly, it made money in 1.5 years but going further back simply wipes my account. My question here is: What has changed in forex in 2008 as compared to starting 2007 and 2006 ?