Thread: First Backtesting results

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  1. #1

    Default First Backtesting results

    Im am still relativley new to trading and I have made a trading system using EMA crossovers on a daily chart and backtested it for 1 year on 6 diffrent markets with the system tweaked to suit each individual market so each diffrent market has diffrent risk reward ratios and position sizes ect. This system was designed with spreadbetting in mind. Its also a long term system with positions lasting a few weeks or even more than a month

    here is how the paper trade turned out with an imaginary ?2000 spreadbetting account

    Backtested one Year plus all the gains and minus the losses

    The FTSE 100 made me ?720 after 11 trades
    The Gold market made me just ?80 after 9 trades
    The Cocoa market made me ?200 after 7 trades
    The Soybean marked made me ?80 after 15 trdaes
    Nestle plc made me ?660 after 13 trades
    And the NASDAQ make me ?960 after 9 trades

    Just a varity of markets i chose

    Thats ?2700 from ?2000 in one year thats 145% return in one year

    what are you views on this is my system two risky to be making such large gains?
  2. #2


    1) It is backtested so you will only know if it is good once you forward test it.
    2) Even if these were forward tested results there are not really enough trades to be sure. One year of backtesting on a daily chart is not very much. That's the equivalent of me testing a system on a 5 min chart for one day> not nearly enough.
    3) Why did you choose those? Was it because they had good trends in the time period, or because they worked better?
    4) What was the maximum drawdown?
  3. #3


    2) Yeah good point i might continue the backtest back a few more years
    3) they are mainly random there where others i chose but couldent affort to trade them because the pounds per point where to much to risk
    4) im not shure i havent added any dates into my spreadsheet but i am risking 2-4% percent of my account on each trade

    just give you a better idea here is the FTSE 100
    risk reward ratio is 1/3
    stop loss 80 points profit capture 240 points at ?1 per point
    open position when 10 day ema crosses the 20 day ema
  4. #4


    You definitely need to backtest longer, over periods that include different market types, e.g. ranging, trending.
  5. #5


    Absolutely. Trending markets are great for systems which employ MA crossovers. They tend to bleed money horrendously when markets are rangebound.

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