Highlights on Backtest in Forex

The backtest is the functionality offered by the trading platform to perform a test by an expert advisor, a forex robot, simulating what would have happened if the expert advisor in question had turned on the mt4 platform during a specified past period, which they possess the data. This backtest operation allows us to run the expert advisor precisely as if it had been installed on the platform in the past like Forex signals (สัญญาณ Forex which is the term in Thai). We will see the operations it would have performed, the profits, the losses, and any action that the robot would have performed with the consequences of profit loss that there would have been.

In practice, we have real feedback that helps us understand if the expert advisor would have gained or not in the past, how much, and how. We can evaluate the drawdown, perform tests with different settings to understand which is the best in the various market phases, change the lots, the size of the operations, or the initial capital, in the =tbacktest. We can even try the robot’s behavior on accounts with different currencies: euros, dollars, or other, without having to change platforms and without having to open different accounts.

The Backtest Data

This aspect is of fundamental importance for performing reliable backtests. Assuming that the backtest is for an Expert Advisor written in MQL4. In language for meta trader 4, here is some brief information on the quality of data available for this platform. This software includes both a development tool for expert advisors and a backtesting environment, where tests can be performed in the past. Before performing the backtests, it is necessary to load the history center, which is the data set for the backtest. This set of data can be downloaded directly from the platform through the “history “center. Unfortunately, in the vast majority of meta-trader four platforms, the history center does not download data directly from the broker’s server. It connects to the met quotes’ server, which is the manufacturer of the meta trader software. The matched quotes data are unreliable, incomplete, full of holes, and do not reflect the real market trend. Therefore their use is not recommended

Author: Razai