The most important
- There are no two same sets of tick data. Even if the quality is 99.9%, the data seem to be different from broker to broker, so don't focus on one single broker or set of data and rather try to see the whole picture.
- As a consequence of the previous statement, we decided to backtest DooZER with tick data from multiple brokers/providers.
- Always backtest with 99.9% quality tick data. Don't rely on bacltests with worse tick data quality.
- We decided to challenge DooZER with 5 years of tick data, from January 2018 to the current day (as of the writing of this article, end of September/beginning of October 2022).
- The spreads used for the tests are the typical average spreads of a Raw Spread Account at IC Markets (no endorsement intended), which is the broker our demo and live trading accounts are at.
Our approach
After a first round of backtesting we quicly realized that there were two currency pairs that were standing out among the plethora of currency pairs (and even metals!) we tested. Those two pairs are EURUSD and EURCHF. The first one is no mistery - the most traded currency, with many good trading opportunities. The second, however, was a surprise. It offered DooZER a very interesting way of trading without the crazy ups and downs of other pairs such the ones with the Japanese Yen. Therefore we started doing a way more intensive round of backtesting focusing only in these two pairs. This said, even though the EURCHF pair was very interesting to trade, it yielded half of the profit of the EURUSD. Again, no surprise. It's maybe not a currency pair to trade alone, but as a second pair to trade along with EURUSD it's perfect. Only recommendable in the M30 timeframe, though. The M1 was too fast for the currency, and didn't do as good. We were also toying with the EURSGD and NZDCHF pair. The EURSGD has a pattern very similar to EURUSD and it surprisingly did almost as good in our backtests. The problem, however, might arise with the spreads. Depending on your broker, it might be worth it or not, but always keep the spread of this currency in mind. If it's too high, then it's pointless. Finally, the NZDCHF was a very nice finding. It's a seemingly calmer symbol that did very good in the test. Objectively speaking it even did better than the EURCHF, but it's a currency pair that it's not very common, so we have to keep monitoring it.
Thoughts out loud
- The EURUSD,M1 was very consistent throughout all tests performing rather well. Also, we noticed the same thing in our forwardtests, and therefore the EURUSD,M1 is one of our recommendations.
- If you prefer calmer trading and less risk (though less potential profit, too) we'll recommend the EURUSD in the M30 timeframe instead. It has performed well, and seemed very solid throughout all data.
- The EURCHF is something we can recommend in the M30 timeframe if you want to open a second chart along with EURUSD,M30.
- The EURUSD,M1 should trade alone. Adding a second chart is something we don't recommend.
- We will keep a close eye out on the exotic EURSGD, which did surprisingly well in our tests, and the NZDCHF cross, this latter with some interesting results in some of the tests, and has some potential as a companion to EURUSD on the M30. However, make sure your broker has good spread on them since they're a little unusual.
- Other currencies did sometimes well and sometimes they did not depending on the broker data. They threw inconsistent and inconclusive results, and we cannot recommend them.
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| Source | EURUSD,M1 | EURUSD,M30 | EURCHF,M1 | EURCHF,M30 | EURSGD,M1 | EURSGD,M30 | NZDCHF,M1 | NZDCHF,M30 |
|---|---|---|---|---|---|---|---|---|
| Alpari ECN1 |  |  |  | x |  |  |  |  |
| Alpari MT5 |  | x | x |  | x |  | x |  |
| Alpari Nano |  |  | x | x | pair n/a | pair n/a | x | x |
| Alpari ProECN |  |  | x |  |  |  |  |  |
| Alpari Standard1 |  |  | x | x | pair n/a | pair n/a |  | x |
| Alpari Standard2 |  |  | x | x | pair n/a | pair n/a |  | x |
| Alpari Standard3 | x |  | x | x | pair n/a | pair n/a |  | x |
| Dukascopy |  | x | x | x | x |  | x | x |
| FXCM |  | x | x | x | pair n/a | pair n/a |  | x |
| FxOpen |  |  | x |  | pair n/a | pair n/a | x | x |
| Rannforex |  |  | x | x | x | x | x |  |
| TrueFX |  |  | x | x | pair n/a | pair n/a | pair n/a | pair n/a |
(All backtests performed with 99.9% quality tick data from the commercial software Tick Data Suite)
