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fractalfreak
1654
fractalfreak 2016.01.18 11:00 

Hi guys,


please see attached some backtest results with minimal risk per trade.


My question:

- Would you agree that the weakest point is the average loss per trade compared to the average win per trade?

- Obviously, over a bigger sample of trades, the drawdown may increase (since all factors are constantly moving) and even the consequential number of loser may increase, right?

- So even with a good win/loss-ratio, an acceptable risk/return-ratio, a low percentage risk per trade, there maybe a longer drawdown in the future, right?


Thx, FF

Files:
real_eaaa.png 25 kb
Stuart Browne
5720
Stuart Browne 2016.01.18 11:54  
fractalfreak:

Hi guys,


please see attached some backtest results with minimal risk per trade.


My question:

- Would you agree that the weakest point is the average loss per trade compared to the average win per trade?

- Obviously, over a bigger sample of trades, the drawdown may increase (since all factors are constantly moving) and even the consequential number of loser may increase, right?

- So even with a good win/loss-ratio, an acceptable risk/return-ratio, a low percentage risk per trade, there maybe a longer drawdown in the future, right?


Thx, FF

Hi FF

I think you answered your own question in the last sentence. The Win/Loss Vs the Risk/Return is what's going to drive your profit factor (ie ROI Vs DD) in any backtest. And as none of us can predict the future (except of course signal providers LOL), yes, there could be a much larger draw down in forward testing than the results suggest.

Keeping an eye on your risk/reward and preservation of capital should always be your #1 concern.

Cheers

Mazen Hesham
278
Mazen Hesham 2016.01.18 21:56  
seems pretty solid
/
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