100% drawdown at the end of backtesting

New comment
 

Hello everyone,

I'm new to the EA world and I'm still learning how to backtest. At the end of every backtest I have a 100% drawdown and I've got no clue why, how can I solve this problem? It makes the report unreadable.

Sorry for the (probably) stupid question.

 
This happens when you got open trades with negative profit at the end of the backtest. All open trades will be closed due to end of test and so the balance goes down.
 
Please show some pics with results
 
Andrei Chiriac:
Please show some pics with results
Here it is
 
lippmaje:
This happens when you got open trades with negative profit at the end of the backtest. All open trades will be closed due to end of test and so the balance goes down.

Any suggestion on how to solve this?

 
lippmaje:
This happens when you got open trades with negative profit at the end of the backtest. All open trades will be closed due to end of test and so the balance goes down.
nukepanda:

Any suggestion on how to solve this?

There isn't a solution because there isn't a problem.

Your EA has a lot of open and losing trades at the end of the test.

The only solution is to write a better EA that doesn't have all the losing trades.

 
Keith Watford:

There isn't a solution because there isn't a problem.

Your EA has a lot of open and losing trades at the end of the test.

The only solution is to write a better EA that doesn't have all the losing trades.

But this is happening with every EA i'm trying to backtest. Some are free ones, some are a demo of very expensive and reviewed EAs. 
 

Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin and leverage. No SL means you have infinite risk. Never risk more than a small percentage of your trading funds, certainly less than 2% per trade, 6% total.

  1. You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.

  2. AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)

  3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
              MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum 2017.10.10
              Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum 2018.02.11
              Lot value calculation off by a factor of 100 - MQL5 programming forum 2019.07.19

  4. You must normalize lots properly and check against min and max.

  5. You must also check FreeMargin to avoid stop out

Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.

 
nukepanda:
But this is happening with every EA i'm trying to backtest. Some are free ones, some are a demo of very expensive and reviewed EAs. 

Then the backtests have served their purpose.
You have found out that the EAs are too risky.

 
nukepanda:

Any suggestion on how to solve this?

Nothing to be solved here. As i pressumed, most likely you use an EA that trade with a martingale/pyramid/grid technique.

Those kind of EAs are very promising for a big period of time, but at some point (since most of them dont use SL), you will encounter a situation that price only moves into a direction without a correction, so EA wont be able to close your positions. This results into blow account.

As i see it, you need to learn to keep under control those kind of situations. (when EA keep opens orders in grid, at more than 30% drawdown, you can place reverse order, resulting into a lock hedge.)

 
Andrei Chiriac:

Nothing to be solved here. As i pressumed, most likely you use an EA that trade with a martingale/pyramid/grid technique.

Those kind of EAs are very promising for a big period of time, but at some point (since most of them dont use SL), you will encounter a situation that price only moves into a direction without a correction, so EA wont be able to close your positions. This results into blow account.

As i see it, you need to learn to keep under control those kind of situations. (when EA keep opens orders in grid, at more than 30% drawdown, you can place reverse order, resulting into a lock hedge.)

Correct answer.

Stop testing 'miracle' EAs.
12
New comment