How to get a backtest result that is accurate (or almost perfect)?
- Do a backtest on a personal computer (laptop) for creating hypothesis (temporarily conclusion for a duration of a week or less).
- Proceed on using the VPS for the backtest (since a backtest procedure almost uses 100% of the processor’s resources, a backtest on a personal computer would practically be very slow, unlike when using a server-level processor – Notes: only a server-level processor is capable of handling such backtest in a faster and more accurate manner). For an instance, if a backtest is being done using a laptop, it needs around 30 minutes, while on a VPS utilizing a Xeon processor or similar type, it would only take around 5 – 10 minutes to complete.
- Only use the tick historical data from LIVE ACCOUNT not from a demo account nor the History Center – the data from history centre can be obtained by clicking the F2 button on MT4, since the historical data of a Demo Account and History Center are different from those which originated from the Live Account. Even the Live Account’s data from each broker differs as well.
- It is not recommended to use the F2 function / the data from the History Center as it originated from Metaquotes, Inc., not from any broker), so that the result wouldn’t be optimal as well.
- Do a backtest within the trading hours (unless there is no other options available), as the spread is different on the weekends (or on closed market). Usually the brokers are increasing the price spread quite significantly by the time of the market closing, resulting to a completely different result compared to a general (live) trading condition.
- Using a low capacity VPS on doing a backtest while running a live account, will be very risky and dangerous (due to a quite large of resources usage – also refer to “Tips on Determining the Number of MT4 (Running Simultaneously) on a VPS).
How to get accurate historical data?
At this moment, we haven’t found any broker that is willingly to share freely the tick historical data (based on the latest information we received, HotForex and OctaFX are now willing to share theirs), especially M1 for 1 year back. The tick data M1 on the MT4 could be only be retrieved for a maximum period of 3 months (so in order to the get the remaining, a contact should be established to the kindly-hearted data collectors).
This is a few guides to backtesting your EA:
Firstly, you need to get the data history, how to do it:
1. Run your MT4 platform
2. Make sure it connect to MT4 server
3. Click on Tools at top menu
4. Click on History Center
5. Choose the Pair that you want to get the history from History Center window, look for the left side window
6. Then click Download
7. After download completed, you can start to test