Can backtest results be too good to be true? - page 2

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Alexandre Borela #:

66 years of the S&P500, his EA would probably look great.

This is why I said that saying "running for X years" will not make sure the EA is consistent, I would rather focus on testing
the EA on unfavorable scenarios to see if it can detect them to stay away and calculate how many bad trades it would
take to blow up the account.

Sure. Again, only testing on 1 currency isn’t wise. Especially when the currency isn’t that volatile. When I test, I prefer 15+ years on multiple currencies just to see if the strategy has any real weight. Then I test on a demo, and then I move to live. It seems we agree to agree :)
 
Of course, in the data during testing it can be much better than on a real account.
 
CLennon:
Tested on nasdaq from 12th oct to 5th nov using real tick data from my own broker and low risk trades 0.5% per position

profit factor and win rate lol
Back test results are nothing , you can not judge it how EA will perform in real account when broker will impose all conditions.
 
CLennon:
Tested on nasdaq from 12th oct to 5th nov using real tick data from my own broker and low risk trades 0.5% per position

profit factor and win rate lol
Amazing results! Very good! Congrats! Please get back here with results after you use it on your live account for like a month.  
 
William Brandon Autry #:
It really is. From a human prospective our minds think 3 years should be more than enough. 

Tell me this, are you the exact same person you where 3 years ago? ;) Are you the same or different with money? 

I agree with you.

The same way most systems working 10 years ago became outdated, they appear new ways to stay profitable.

 

My manual back testing tells me that if I did buy on OCT 12 and sold on NOV 5 I would make 200%. One trade, 0% drawdown amazing strategy, only if I know that on OCT 12.

 
Darivsz Sokolowski #:

My manual back testing tells me that if I did buy on OCT 12 and sold on NOV 5 I would make 200%. One trade, 0% drawdown amazing strategy, only if I know that on OCT 12.

So
It seems like your strategy can predict the past…. 😁… sorry… just jockeying 
 

I think BACKTEST is just a tool for developers to check their bugs . 

There are many factors might cause a beautiful BT result and also there are many factors which BT can not be tested at all . 

If you want to test your robot/strategy , just go on live , no need to give a post here . Result tells a result . 

 
Many brokers give you good results in the demo.  They give false data and watch your buy and sell points and trade against you. When I first started building EA's I would make unbelievable money in demo and never the same in live.  I created EA's that hide the buy and sell and did amazingly better.  The reason most fail in Forex trading is broker corruption.  Many countries don't regulate these brokers.  I would also say never trade with leverage.  No matter what anyone tells you, your gambling with money you don't have.  Make sure you have a stop loss set.  Your not trading against the currency, your trading against the odds of finding a honest broker.  I would find the country with the strongest restrictions on brokers like the  US, UK and Australia.  
 
Jonathan Mcbrine #:
Many brokers give you good results in the demo.  They give false data and watch your buy and sell points and trade against you. When I first started building EA's I would make unbelievable money in demo and never the same in live.  I created EA's that hide the buy and sell and did amazingly better.  The reason most fail in Forex trading is broker corruption.  Many countries don't regulate these brokers.  I would also say never trade with leverage.  No matter what anyone tells you, your gambling with money you don't have.  Make sure you have a stop loss set.  Your not trading against the currency, your trading against the odds of finding a honest broker.  I would find the country with the strongest restrictions on brokers like the  US, UK and Australia.  

I do not think some broker was hiding buy or sell ...
It is because money in demo and in live are not the same in many cases (because the data/quotes/prices is slightly different in demo and in live).
Because because backtesting on MT4 is not same as live trading on MT4 in many cases.

More -

Forum on trading, automated trading systems and testing trading strategies

entry price in ea backtesting different from live trades why

Sergey Golubev, 2021.12.08 18:53

Entry price in live trading may be different from th backtesting results in the following cases:

  • your EA is for MT4 (and it is almost always different; if not so it is the subject to the discussion on the way to the following: "which special technique do you use to be the same ...");
  • your EA is for MT5, and you are backtesting your EA on some backtesting way other then real ticks.
  • bug in your code;
  • martingale/hedging - it depends on the many factors, such as the following: number of ticks used, time/hours/min to be started to trade, data quality provided, and some more.
  • more.

Testing trading strategies on real ticks and the explanation is on this post. 


Forum on trading, automated trading systems and testing trading strategies

Why results are different from mt4 to mt5

Sergey Golubev, 2021.11.08 10:17

It should not be same (especially for MT5, because the data of MT5 is not from MetaQuotes).

There are some ways about how to detect "scam" ("forex scam"; and this is very old story).
- one person told: "my EA is profitable for MT4 - look at my backtesting result."
- we can ask: "Which broker?"
- if he reply as "every broker" so it is most probably - "scam".

Next situation:
- "my EA is profitable because I backtested it on MT4 with good modelling quality"
- most probably - "scam" (because backtesting and real trading should not be the same in most of the cases for MT4 within one broker).

Other situation.
- If someone told that "My EA is profitable for broker A during the period of testing because I backtested it with "every tick based on real tick" mode in MT5".
- So, we can trust this result and this person (because it will be same as with real trading for the broker A for example).


Forum on trading, automated trading systems and testing trading strategies

Every tick VS Every tick based on real ticks AND latency on StrategyTester (backtesting)

Sergey Golubev, 2017.04.25 18:24


...

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Of course, if you are planning to trade EA with some broker so you will use broker's data/tick. If you do not like their data so you may change the broker with more good data.

And the data/ticks are not unified for the different brokers ... For example, there are some indicators (iTrend for Brainwashing system for example) which are showing the different results with the different brokers.

There are some EAs (for example: for day trading on D1/W1, martingale) which will have very similar results/performance with the dufferent brokers during the trading. But there are many EAs which are having the performance based on the brokers' data (intra-day trading EAs, scalping, counter trend EAs, and some more).

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If some person will tell me the following: "I have profitable EA."
I will ask him: "Which broker for" (is it profitable for which broker?)
If he will reply: "Any broker" so he is using martingale strategy, or he is trading on W1 timeframe with the trades opened once per half a year for example.

In this way we can understand the recommendation of the MetaQuotes for subscribers concerning the signals to use same broker with the signal provider.

---------------------

...
 

Many traders are converting their EAs to MT5 (from MT4/mql4 to MT5/mql5) just to backtest EAs with "every tick based on real ticks" to use the broker's data to backtest EA.

Testing trading strategies on real ticks and the explanation is on this post. 

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Thus, it is not a broker which is hiding buy or sell.
It is the trader/user/coder does not understand (and does not care) about the following:

  • meaning of backtesting in MT4 and the meaning of backtesting with "every tick based on real ticks" in MT5;
  • about differences of backtesting in demo and in live in MT4;
  • about differences between martingale EAs;
  • about the differences of backtesting and trading by EA which were coded on open and/or close bar;
  • more.

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Testing trading strategies on real ticks
Testing trading strategies on real ticks
  • www.mql5.com
The article provides the results of testing a simple trading strategy in three modes: "1 minute OHLC", "Every tick" and "Every tick based on real ticks" using actual historical data.
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