All Blogs / Analytics & Forecasts / Trading Systems

HOW TO BACKTEST STRATEGY EFFICIENTLY

17 July 2023, 05:56

Dao Thi Thanh Nguyet

287

HOW TO BACKTEST STRATEGY EFFICIENTLY

Here, I show how to Backtest AutoControl EA bot on the MT5 Platform Backtest tool

1. Select currency pairs, metals, stocks,..

First choose a currency pair as recommended by the developer (XAUUSD)
Next, let's test 3 more popular pairs such as: EURUSD, GBPJPY, XAUUSD
Save the results and compare the difference between the test results, then make an appropriate adjustment plan.

2. Time frame selection

3. Data interval selection

Selecting data from the last 2 years will give the most accurate data, and the fastest check
The older the time period, the less quality the results
Please note, if during the period that AutoContro EA runs abnormally fast, data may be interrupted or incomplete.
Can test larger data from 3 - 5 years, however for some currency pairs the data is not enough or not high quality
It is also possible to test interlaced for faster processing: Example test from 2018 - 2020, 2019 - 2022, 2021 - 2023

4. Delay level selection

Please select the current delay mode according to your computer
More selectable: Zero delay mode, random delay mode
From there analyze the difference between the lags, if all three have a profitable result

5. Data Model Selection

First choose a model: 1 Minute OHLC, this data model only gives approximate results, but will process quickly. If the result is good, go to step 2
Step 2: Switch to Every tick based on real tick model, the results will be the most similar to the results when trading in real time
If the result is good, save the Set file, if the result is not good, change the parameter and repeat from step 1

6. Initialization of initial capital

Initialize the capital from 25000USD, to make sure the strategy is not working properly due to lack of funds
After the results are available, analyze and reduce the initialization amount accordingly
If not suitable for your investment, choose the strategies (parameters) as suggested by the developer, or contact directly for help.

B E G I N

1. Select QuickBacktest mode in Input section of AutoControl

When this mode is selected to True: Initialization of plotting will be eliminated, which will help the Backtest process to be processed faster.
When using it directly, change to False

2. Select ModeLoadSet mode in Input section of AutoControl

YourSettings: The parameters in the Input section after you change it will be activated

ExpertSetup1,2,3 : The parameters in the built-in "A U T O T R A D E" section recommended by the developer will be initialized when AutoControl runs

First select ExpertSetup or Import Set files from the developer's recommended parameters

Step 2: view the analysis results and re-optimize the parameters if desired, note: Switch to YourSettings

A U T O T R A D E

1. Strategic choice

AutoControl is integrated with 20 different strategies
Test each strategy if you want and from there make the right strategy choice for you
Some strategies will not use preset parameters, refer to STRATEGIES GUIDELINES

2. Select LimitGapPoint

Is the minimum distance Step between 2 close orders, in points
The smaller the LimitGapPoint, the less orders will be entered, the trading performance will decrease, but the risk will be reduced.
The larger the LimitGapPoint number, the more orders are entered and close together, the trading performance can be increased, but with great risk.
Each currency pair is different, the number of LimitGapPoint will also have a different suitability

3. Other parameters

I N D I M A S T E R

The parameters tell me it's already optimized, so if you don't need further tweaking.
To optimize the strategy, first adjust in the section B E G I N, A U T O T R A D E
Note some strategies will not use the indicator, some will read STRATEGIES GUIDELINES for better understanding
The indicator can be plotted on the chart or not according to the option in the A D V A N C E section

Above are the basic instructions for Backtesting in the most effective way

You can absolutely ask for help from the developer when needed