I spent the last couple of days doing more than 30 backtests on Euro-Blaster, covering the last five and a half years. I think my computer needs a break. It’s not used to having to work quite that hard.

Let me say upfront that it is important to realize that the strategy tester in Metatrader 4 can only tell you so much. The results are very much approximated and should not be viewed as exactly what would have happened. There are many issues, such as spreads at the time of the trades, off quotes errors, etc. that cannot be duplicated in the testing environment. In general, there would likely be fewer trades in real life than the tester indicates. With that small caveat out of the way, let me say that MT4’s strategy tester is at least beneficial in giving you an idea of how a certain strategy or EA might perform. In other words, if it does really well in testing, you *might* be on to something. And, conversely, if it does really poorly, there is a good chance the strategy will fail in real-time as well.

I’m going to be blunt here. I was disappointed in the backtesting results for Euro-Blaster. Except for 2008, which was a simply unbelievable year for this robot, the other years produced large losses for most of the presets that were tested. It is true that the 350 and 500 pip stoploss level is rarely reached, but listen carefully — it WILL happen. It’s just a matter of time.

Amazingly, at least according to the backtests, the 500 pip stoploss was never breached in 2008. The result? Investing just $1,000 on January 1 while using the aggressive preset yielded over $10 million by the end of the year! Nice Christmas present, eh? But each of the other four years saw at least one bad loss, which resulted in the account losing almost all of its value when using the aggressive preset. Interestingly, the basic preset fared even more poorly than the aggressive set. The standard preset fared much better and was positive for three of the six periods tested. A conservative preset (2% risk, 3 MaxTrades) was added to the testing. It is a much safer way to trade the EA, but its returns tend to be fairly modest.

Though I don’t put all my apples on backtesting (I much prefer forward testing), I do think these results bear some consideration. More thoughts later…

Oh, all the backtests are available for your review on the Results page.

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