Nice paper backtest, probably will fail in the future, why? :( | Forex Factory

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Nice paper backtest, probably will fail in the future, why? :(

  • #1
  • First Post: Feb 28, 2021 12:20pm Feb 28, 2021 12:20pm
Hi,

Long time out here and out Forex. Now I'm back, just for fun.

We all know most of EA, paper or visual baktests tend to fail in the future.

Now I have one of the hundreds of strategies that I have thought:

3,5 year paper Backtest, more than 2000 trades:

6 losses (20% each)
14 wins (11% each)
20 wins ( 6% each)
22 wins ( 3% each)
52 wins ( 1,5% each)
151 wins ( 0,5% each)
1875 wins ( 0,1% each)

My question is, Why this stratetegy will be loss in the future and how to fixed?

Thanks for read
  • #2
  • Feb 28, 2021 5:40pm Feb 28, 2021 5:40pm
5 consecutive losses and your account will be blown away. I would suggest that you lower your risk as well as your target ...

Btw, have you tried the strategy on higher timeframes?
Market is not random but unpredictable
  • #3
  • Feb 28, 2021 6:17pm Feb 28, 2021 6:17pm
Quoting 4for4
5 consecutive losses and your account will be blown away. I would suggest that you lower your risk as well as your target ... Btw, have you tried the strategy on higher timeframes?
impossible to have 5 consecutive losses in a row...........
  • #4
  • Feb 28, 2021 7:47pm Feb 28, 2021 7:47pm
Quoting yonnie
{quote} impossible to have 5 consecutive losses in a row...........

Attached Image
Market is not random but unpredictable
  • #5
  • Feb 28, 2021 9:05pm Feb 28, 2021 9:05pm
It's important to look at more than just the wins and losses. What's the profit factor? What's the max draw down?

If the system has a draw down of less than 10% and a profit factor >1.5...you might have a winner. Even then, it's still hard to tell just posting a few numbers.
  • #6
  • Feb 28, 2021 9:06pm Feb 28, 2021 9:06pm
hello Kfx, wow....must have been a lot of work to backtest on paper for 3.5 years......I would like to look into your strategy to see if its got any value.....if so and if you want to, I could trade your strategy on one of my low value real accounts and keep you up to date of its performance......
  • #7
  • Mar 1, 2021 7:36am Mar 1, 2021 7:36am
6 trades with 20% of dd for each is too much, change your risk control (maximum allowed risk or dd). It would be more effective if your losses amount will increase but the full d will be less then 20% per trade. A lot of trades have small profit amount, so maybe you should keep it more, so use higher timeframe.
  • #8
  • Mar 3, 2021 3:51am Mar 3, 2021 3:51am
Quoting 4for4
5 consecutive losses and your account will be blown away. I would suggest that you lower your risk as well as your target ... Btw, have you tried the strategy on higher timeframes?
Thanks for your answer 4for4,

Yes, you are right ... The point is I have a small live account (2k), and I assume this risk just thinking like I have a 10k account and 4% risk in a loss, so at the end of the day I loss 2k in both scenarios if I have 5 or 6 losses in a row. Either way, with 4 losses in a row or without nice recovery time, I will stop trading this system.
  • #9
  • Mar 3, 2021 3:52am Mar 3, 2021 3:52am
Quoting yonnie
{quote} impossible to have 5 consecutive losses in a row...........
Thanks for ur answer yonnie,

never say, never
  • #10
  • Mar 3, 2021 3:54am Mar 3, 2021 3:54am
Quoting DaysOff
It's important to look at more than just the wins and losses. What's the profit factor? What's the max draw down? If the system has a draw down of less than 10% and a profit factor >1.5...you might have a winner. Even then, it's still hard to tell just posting a few numbers.
Thanks for ur reply DaysOff,

I'm finishing a mql5 EA so I will get all this numbers and statistics soon. Too much time out of mql4 programming and now I have to learn mql5, hahaha, but the EA is almot finished.
  • #11
  • Mar 3, 2021 4:16am Mar 3, 2021 4:16am
Quoting yonnie
hello Kfx, wow....must have been a lot of work to backtest on paper for 3.5 years......I would like to look into your strategy to see if its got any value.....if so and if you want to, I could trade your strategy on one of my low value real accounts and keep you up to date of its performance......
Wowwww ... Thanks a lot for ur offer, but I alredy have my own live accoun running this strategy. Those are the numbers so far ...

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  • #12
  • Mar 3, 2021 4:19am Mar 3, 2021 4:19am
Quoting MarcellusLux
6 trades with 20% of dd for each is too much, change your risk control (maximum allowed risk or dd). It would be more effective if your losses amount will increase but the full d will be less then 20% per trade. A lot of trades have small profit amount, so maybe you should keep it more, so use higher timeframe.
Thaks for ur reply MarcellusLux,

Yes, As I write before I'm thinkinlike I have a 10k account so I assume a 4% risk

Higher timeframe? I'm using 1 hour TF and the strategy is designed for that TF, buy maybe I will test in 4H or 1D when I finish the EA.
  • #13
  • Mar 5, 2021 6:04am Mar 5, 2021 6:04am
1 month of my strategy (probably a losser one). I will call it "Undercover Five" ... I will use this thread like a diary and I will post some update and ideas.



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  • #14
  • Mar 5, 2021 6:12am Mar 5, 2021 6:12am
More details about Undercover Five:

The strategy have 3 main Phases:

Phase 1: Acumulation

This phase will be from which we will obtain the income. Small profits on a lot of trades

Phase 2: Saving

In this phase we will save for when the hard times (losses) arrive and we are fully covered

Phase 3: Recovery

In this phase we will use the appropriate MM to recover from a loss or losses as soon as possible
  • #15
  • Mar 12, 2021 1:16pm Mar 12, 2021 1:16pm
First try of the EA, from 01/2018 to today, not finished yet (No MM, no MultiPosition, etc ... )

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  • #16
  • Mar 19, 2021 9:29am Mar 19, 2021 9:29am
New update. Just add to MyFxBook, so far so good

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http://www.myfxbook.com/members/FxFr...r-five/8101202
  • #17
  • Mar 19, 2021 9:59am Mar 19, 2021 9:59am
Quoting Kfx
{quote} Thaks for ur reply MarcellusLux, Yes, As I write before I'm thinkinlike I have a 10k account so I assume a 4% risk Higher timeframe? I'm using 1 hour TF and the strategy is designed for that TF, buy maybe I will test in 4H or 1D when I finish the EA.
If you have a 4% risk, then your 20% calculation it means that you use an increasing lot, the well known prostitute method.
Stop using OANDA!You will lose money,they stop PRACTICE accnts, kept SPIKES
  • #18
  • Mar 19, 2021 10:36am Mar 19, 2021 10:36am
I have yet to find a system that was profitable at 4% risk or greater that wasn't profitable at 1% risk or less. That tells me you are taking 4X the risk you need to to prove out your system. That tells me you are not properly considering the true risks of Forex trading. Saying it doesn't matter because your account is small is simply rationalizing poor risk management, which will almost always lead to failure. I wish you all possible success and advise you to carefully research and practice good risk management. Of course, that's just my own humble opinion. I could be wrong. Happy Trading! - G
  • #19
  • Mar 19, 2021 12:14pm Mar 19, 2021 12:14pm
Quoting rtopa43
{quote} If you have a 4% risk, then your 20% calculation it means that you use an increasing lot, the well known prostitute method.
I love Brazil lol
  • #20
  • Mar 19, 2021 2:25pm Mar 19, 2021 2:25pm
Quoting Graviton
I have yet to find a system that was profitable at 4% risk or greater that wasn't profitable at 1% risk or less. That tells me you are taking 4X the risk you need to to prove out your system. That tells me you are not properly considering the true risks of Forex trading. Saying it doesn't matter because your account is small is simply rationalizing poor risk management, which will almost always lead to failure. I wish you all possible success and advise you to carefully research and practice good risk management. Of course, that's just my own humble...
Thanks for ur reply Graviton,

As u can read in my first post in this thread, "Now I'm back, just for fun."

Just for fun not for invest and take some big risks in Forex market. Nowdays my big investments are in another more stable acives

And since is for fun I desposit very small money in the broker and take this risk.

I could wait 2 or 3 years and see how the strategy loses little by little 1% or 2% and grow very very more little.

The longer a strategy runs, the more probabillities it will become unprofitable.

So I preffer to take a big risk in less time, so the probabillity of big wins are higher. And of course, more exciting for me to have fun

And at this point, here is the main question on my first thread: "My question is, Why this stratetegy will be loss in the future and how to fixed?" ... And now I add "Even we take a litthe risk"
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