Bob Davids
1982
Bob Davids  

The reason why forward testing instead of backtest

--Id--:
Sorry to keep this, John, but cannot avoid questioning the fundamental diferences between forward and berckward testing, for the news. Anyone can clarify that? As there are a significative amount of work towards news, it is important to know the exact flaws of testing.

A few simple idea to make you understand is, if you're in the progression of 5th, current lot size is short 1.6lots, account balance is 5k floating p/l is -3k, NFP came in, move down 160pips... guess what...... BOMB!!!!

Another 1 is, you're down long 1.6lots, account balance is 5k floating p/l -3k, NFP came in, move up 160pips, congratulations! Profit! Account 10% up, what's next? Continue long, keep going and going. Take a look at what happened to 8th December, 2006 NFP.... guess what..... BOMB!!!!

Another 1, you're in good hand, only 1 position in hand with short 0.1 lots. NFP came in, stack up 160pips, with pip step 15....guess what....BOMB!!!!

Just 1 more, you're in good hand, only have 1 position in hand with long 0.1lots. NFP came in, profit all the way up 160pips, great, account up by 6%. Congratulations.... AGAIN! after 2 hour, you're now in good hand long 0.1 still in profit. Bernanke decided to clear throat and reannounce NFP corrections, GBPUSD plunged by 220pips in 1 hour.....guess what....BOMB!!!!

Please refer the above scenario with the chart on 8th December, 2006 NFP day. I can assure you pipstep 15 aint work on that day!!! That is the purpose of forward testing...understand?LOL

Bruno
153
Bruno  
davidke20:
A few simple idea to make you understand is, if you're in the progression of 5th, current lot size is short 1.6lots, account balance is 5k floating p/l is -3k, NFP came in, move down 160pips... guess what...... BOMB!!!!

Another 1 is, you're down long 1.6lots, account balance is 5k floating p/l -3k, NFP came in, move up 160pips, congratulations! Profit! Account 10% up, what's next? Continue long, keep going and going. Take a look at what happened to 8th December, 2006 NFP.... guess what..... BOMB!!!!

Another 1, you're in good hand, only 1 position in hand with short 0.1 lots. NFP came in, stack up 160pips, with pip step 15....guess what....BOMB!!!!

Just 1 more, you're in good hand, only have 1 position in hand with long 0.1lots. NFP came in, profit all the way up 160pips, great, account up by 6%. Congratulations.... AGAIN! after 2 hour, you're now in good hand long 0.1 still in profit. Bernanke decided to clear throat and reannounce NFP corrections, GBPUSD plunged by 220pips in 1 hour.....guess what....BOMB!!!!

Please refer the above scenario with the chart on 8th December, 2006 NFP day. I can assure you pipstep 15 aint work on that day!!! That is the purpose of forward testing...understand?LOL

Thank you for your post davidke20. My point here is that news, bad or new for this EA, are imprinted on the history bars, aren't they? As tests are run nearly for "every tick", can't we assume news are simulated also, as if the EA were running on those very moments?

I see the impact of news on the EA, but doesn't history account for that?

Thanks.

yeoeleven
840
yeoeleven  

Recommended EA

hksweeper:
Hi John,

Firstly, thanks for forward testing different 10point3 series EAs and posting the report, so we can have a better understand of the attitude and limit of those EAs.

Can you please kindly advise if your recommended EA and setting has been changed from the above suggestion? Is it still being used on the m30 time frame?

Your experience and advice are highly appreciated.

Thanks in advance!

Regards,

Geoff

Just now I am watching RMI and am not happy about the progression just shown. It has increased from 2.0 to 4.0 to .4 to .8 it can return to profitability but will need to return to the original starting price to do it. Martingale EAs usually return to profit with a relatively small retraction and that will not apply in this case. In short I wouldn't trust this EA unless mrtools advises us that is the way it has been programmed and all is well.

My recommended EA is found on this thread on page 18 the original 10points3 Dynamic Stop as modified by tururo. I am still testing this version and during the last week has also shown good results. I have been using MM1 and Risk3 so the results have been profitable but also has the risk been high. Settings are:-

TakeProfit=38.00000000

Lots=0.10000000

InitialStop=1.00000000

TrailingStop=28.00000000

MaxTrades=5

Pips=18

SecureProfit=28

AccountProtection=0

OrderstoProtect=0

ReverseCondition=0

EURUSDPipValue=10.00000000

GBPUSDPipValue=10.00000000

USDCHFPipValue=10.00000000

USDJPYPipValue=9.71500000

StartYear=2005

StartMonth=1

EndYear=2007

EndMonth=12

EndHour=22

EndMinute=30

mm=1

risk=3

AccountisNormal=0

Magic=10201

Can't say that I am happy to see the progression to reach 12.8 but it is a demo account starting at $25000. These are the settings currently in use for my competition with David as mentioned previously on this thread.

All in all whatever settings you use there is the constant fear that MaxTrades will be closed down. If the MaxTrades is too small then it will happen too frequently and if too high may break the account.

There are members currently working out changes that may eliminate that problem. mtaboneweb Matt is working on a reverse during the progression, David is looking at a pyramid version, mrtools is always looking to improve the direction of trading.

Lately I have been only trading EURUSD with higher starting price and avoided the highly volatile GBPUSD my TF for both versions is M30.

Good luck for your trading,

John

Files:
10pts31.htm  12 kb
10pts31.gif  5 kb
Bruno
153
Bruno  

As I resurrected the forward vs backward battle, I would like to end it.

For those who, as myself, couldn't understand the major flaws of back testing, here is something that might clarify things:

http://www.metaquotes.net/experts/articles/tester_intro

So I keep up with forward, but less aggressive settings.

Bob Davids
1982
Bob Davids  
--Id--:
As I resurrected the forward vs backward battle, I would like to end it.

For those who, as myself, couldn't understand the major flaws of back testing, here is something that might clarify things:

http://www.metaquotes.net/experts/articles/tester_intro

So I keep up with forward, but less aggressive settings.

Ditto that. Anyway, its only a discussion. Glad you enjoy it. 1 more thing i need to emphasise again here is, the slippage on live account and demo account is greatly different.

I experience the Thanksgiving present from GBPUSD.

Live account : -70% margin(trailing stop aint kick in, continue short)

Demo account : survived with mild profit(trailing stop kicked in, change direction to long)

Backtest : closed with profit!!!

I'm now live with 76initial stop. Once in a while will hit stop loss, and its very painful. Therefor, normally after 100% capital gain, I'll transfer my profits back to my main account.

MiniMe
2125
MiniMe  
davidke20:
Ditto that. Anyway, its only a discussion. Glad you enjoy it. 1 more thing i need to emphasise again here is, the slippage on live account and demo account is greatly different.

I experience the Thanksgiving present from GBPUSD.

Live account : -70% margin(trailing stop aint kick in, continue short)

Demo account : survived with mild profit(trailing stop kicked in, change direction to long)

Backtest : closed with profit!!!

I'm now live with 76initial stop. Once in a while will hit stop loss, and its very painful. Therefor, normally after 100% capital gain, I'll transfer my profits back to my main account.

Thanks David

Thats what I have been trying to say for the guys here ... lots of backtest which gives misleading information to new traders ... as the 10point3 will always gives +ve backtest ..anyhow I think you did a good job in explaining this issue .. I hope no one burns his account running the 10point3 on news... good luck guys

[Deleted]  

I've been looking on this EA for awhile, than I discovered there's a big wasting for money on the system as it is, because a lot of time it close all open trades even the first trade wile it reopens a now positions on the sime direction.

why close the position when u still plan to open a new one on the same LOT and the same direction isn't it a wasting of spreads?

since i'm not a programer I can't fix it myself mybe somebody will.

Bob Davids
1982
Bob Davids  
yocy1:
I've been looking on this EA for awhile, than I discovered there's a big wasting for money on the system as it is, because a lot of time it close all open trades even the first trade wile it reopens a now positions on the sime direction.

why close the position when u still plan to open a new one on the same LOT and the same direction isn't it a wasting of spreads?

since i'm not a programer I can't fix it myself mybe somebody will.

Well, well, well... great thoughts and same before my 1st margin call with 10point3 remove the TP, put the trailing stop as your TP, you try and see... Take my words, if your 1st position is long, you will never see short in your statement..... again.... guess what......B O M B !!!!!

Very kind regards,

DAVID

yeoeleven
840
yeoeleven  

Rmi

I have found out why RMI has performed strangely in regard to the unit and pip progression the settings when my first 2 trades were made were as per my post but the EA must have closed down and started up with the default settings and having already opened 2 trades carried on with .4 then .8 and now 1.6. I certainly would have been aware of the change it I had done it manually.

It had mystified me and after I noticed the different pipsteps I realized that there was more to it than the opening units. RMI is still in a loss situation but hopefully it will pull out eventually.

John

Bruno
153
Bruno  

Slippage and stability

davidke20:
Ditto that. Anyway, its only a discussion. Glad you enjoy it. 1 more thing i need to emphasise again here is, the slippage on live account and demo account is greatly different.

I experience the Thanksgiving present from GBPUSD.

Live account : -70% margin(trailing stop aint kick in, continue short)

Demo account : survived with mild profit(trailing stop kicked in, change direction to long)

Backtest : closed with profit!!!

I'm now live with 76initial stop. Once in a while will hit stop loss, and its very painful. Therefor, normally after 100% capital gain, I'll transfer my profits back to my main account.

Slippage is one of my main concerns in live trading with this EA. Other range-bound EAs has a slippage control parameter, which I don't see in 10p3.

Other concern is with stability. Although my metatrader terminal is on a very reliable network , we all know InterbankFX will show connection problems from time to time, rejecting orders and so on...

So to continue from testing those, the EA and news impacts, I am running tururo's version with mini-micro lots, real account. I will keep posting results.