Backtesting in MT4 is a simple process that does not require much configuration or technical knowledge. This is why it is a perfect option for beginners to see how the expert advisor would behave in the past considering essential historical data on stocks or some other traded assets. However, most newbies still wonder how to backtest in MT4, as they do not know what to start with.
In this article, we will review some of the main backtesting hits and misses, what it is necessary for, and actually how to run backtesting with MT4.
Backtesting literally means working with the expert advisor integrated into the MetaTrader platform. It is another reason why millions of users opt for this automated trading software with dozens of comprehensive tools and utilities that make the trading process running smoothly.
When we say “backtesting with MT4”, we actually mean running the built-in expert advisor using the generated historical data to see how it would behave in the past considering current financial market conditions. If performed properly, the process makes it possible to see how the asset will perform in the nearest future.
However, traders should clearly understand that past results never guarantee a favorable outcome in the present. Even 100% profit in 1 year with a 1% possibility of drawdown does not mean the situation will be the same in reality. Backtesting can be misleading and result in serious losses. You need to keep that in mind before entering the market to take action.
Utilizing an integrated MT4 expert advisor for backtesting may bring some obvious benefits:
Unfortunately, backtesting with MT4 gas some crucial downsides you need to keep in mind while using the platform:
The process itself is quite simple. It does not require any skills or experience. You will only need to follow these easy steps:
The expert will be launched automatically to process historical data and come up with the current results. Make sure the historical data you use is accurate. Otherwise, backtesting in MT4 will make no sense.
When traders say “backtesting”, they mean testing their experimental strategies based on historical data using the expert advisor integrated into MT4. It is a fast, simple, and automated way to test your potential strategy success. At the same time, the process requires accurate data and proper implementation. Besides, it never guarantees profit or success under real market conditions.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.