Alpari backtest data may be total nonsense!!

I may be wrong, I'm new to Forex, but.........

I tried to backtest a system with Alpari, the year happened to be set to 1988-2008. I selected EUR USD and clicked go.

Now last time I checked the Euro was introduced in 2002, but I got data from 1989 onwards.

Either the euro had a had value 14 years before it was introduced or someone is making up numbers........

Does anyone know why this is?

I believe the data they used was figures from currencies that existed to make up the eu today. So the data is correct.

Any idea how thats calculated? Was it an average of all 12 currencies?

Whatever it is, I feel it is pointless to backtest with anything before 2003. Give it a chance to find its place in the market.

Its never crossed my mind how they actually calculated it. I have no idea how they did it.
I wud imagine the data created for it wud have been programmed and then they pass the data through it to work it out.

Some wud argue you want to back test as much data as you possibly can because it gives for accurate readings because as time goes on markets change. But to be honest just test it from 2003 should be fine. You mainly want a good thorough forward test to be done though, that I wud argue is more important than backtest, just my view.

Thats what I am doing, I have a forward test of a few months now.
The results are too good to be true and its scaring me.
Backtesting is not as good however.

scoobert it was 99 not 03 that the euro came out

and you can argue that it is a different pair every time a new country joined the union.... thus backtests are valid only for the timeperiod that its set of countries remained unique.

i think its safe to assume that alpari knew what they were doing when then filled their databases.

http://www.fedee.com/euroreview.html
http://news.bbc.co.uk/1/hi/uk_politics/2417245.stm
these sites say it was 2002, as did I, I said data from 2003 onwards would have found its place in the market

i just did it again, requested data for the whole of 1990 and it gives a result

in the second link is all you need :

" In January 1999, the euro was launched as an electronic currency used by banks, foreign exchange dealers, big firms and stock markets in 11 countries - Belgium, Germany, Spain, Italy, Ireland, Luxembourg, the Netherlands, Austria, Portugal and Finland "

"
Exchange rates of the participating currencies were set and eurozone countries began implementing a common monetary policy.
In 2002, euro notes and coins became legal tender in 12 countries - Greece having also met the conditions needed to join."

That doesn't explain data for 1990

http://en.wikipedia.org/wiki/European_Currency_Unit

they replied with something similar


Dear Sir
Thank you for your email.
That’s very interesting.
At that time there was a tradeable unit of currency called the European Currency Unit (ECU) which was comprised of a basket of European currencies (Deutschemark, French and Belgian Francs, Lira, Dutch Guilders Irish Punt etc).
It may be that this data was converted into historic Euro data but we cannot be certain.
Therefore I would suggest NOT relying on data before 2002.