Period of historical test data + explanation.

Have you created a strategy and want to check your historical results?

You have a dilemma what historical data to use to make the test reliable?

You've come to the right place 😊 , in this article, I explain what period of time is optimal and why.

Most traders carry out historical tests over the past two years, but is that enough?

I know from experience that this is too short a period to determine if the strategy is likely to be profitable in the future. Why do I think so? the reason is simple, variability.

Check strategies in different conditions to increase the likelihood of profitability


In the last two years (2017-2019) the volatility on the EURUSD pair sniffed between 0.0106 0.0030 (ATR indicator 14 periods, daily chart) but e.g. in 2015 this range was 0.0181 to 0.0091 or almost two times that much.

Do you know how your strategy will behave in such conditions since the period of historical data was only two years? Or when will volatility reach such or smaller values ​​again?

This is a great unknown, which is why it is so important to check the strategy's behavior under various conditions.

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