What is Backtesting?
Backtesting is the process of testing a trading strategy or Expert Advisor on historical market data. It simulates how the EA would have performed in the past, providing metrics like profit, drawdown, win rate, and trade frequency.
Using MetaTrader 5 Strategy Tester
MT5 Strategy Tester supports multi-currency and multi-timeframe testing. Open it via View > Strategy Tester. Select the EA, symbol, period, and date range. Use 'Every tick based on real ticks' for the most accurate results.
Common Backtesting Pitfalls
Over-optimization (curve fitting) to historical data, ignoring spread and slippage, testing on too short a period, look-ahead bias in custom indicators, and survivorship bias when selecting which EAs to test.
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