A surprisingly little-known, correct way to view backtests
Writer:TACA (Kisai Hayashi)
Starting with VB6 for strategy testing development and creating hundreds of EAs. From that experience, technicals shine in short-term trading oscillators and with conviction.
How to Read a Strator Strategist Tester (Backtest)
What is a BacktestI don't think it's necessary to explain backtesting from scratch for MT4 users.
It is a test to examine the performance of an EA from past data. Of course, actual operation will not go exactly as the backtest.
Nevertheless, you can extract various information from backtests.
In this article, we will introduce from basics the information to look for in a backtest and how to use it.
So many hints were included...
Screen Explanation
The results of backtests you often see contain many subtle hints.Hidden are quite a few tips.
Let's inspect the details from the top.
1.Strategy Tester Report→ Fixed title of the backtest
2.DeliriumRSIUSDJPY → Name of the EA
The EA name contains many hints.
Let's analyze a bit.
The EA name includes the letters RSI. It uses RSI as an indicator, i.e., an oscillator.
Looking at the FX-ON EA ranking, many have RSI or MA in their names.
Trend is MA, oscillator is RSI, is that popular?
Delirium is a product name, but if you like this EA, search with this name.
You may find related series of EAs or the latest versions.
Currency pair names, numbers, or colors in the name often indicate related EAs.
Other hints are hidden, such as terms like swing, scalping, or TS (trailing stop).
3. OANDA-Japan Live(Build 950)→ Broker name and MT4 version
When purchasing an EA, try to match the broker with the backtest as much as possible.
Although spreads and fees vary by broker, differences in spread can cause an EA to malfunction due to stop levels.
For brokers with non-fixed spreads, you should check whether the backtest spread is the average, the maximum, or the minimum.
A typical comparable line is average plus about 1–2 points.
Fees are treated as costs, which can be tax advantageous.
To reflect fees, log in to a broker that charges fees and run the backtest there.
If the broker name contains DEMO, it is a demo account.Be particularly careful whether the fees are reflected.
The stop level can be checked in the price quote screen.
A stop level of 10 means 1 pip if displayed in three digits, or 10 pips if displayed in two digits.
If the stop loss or take profit is not at least as far away as the stop level from the current price, orders or changes will not be accepted.
Be cautious with EAs that use trailing stops.
In the first part, we explained the top three lines of backtests that are usually ignored.
How was it? In the next part, we will explain a few more items. If you have any questions, let me know.
