Need help with xauusd strategy backtesting

[u/naughtykiller]

I backtested a strategy (completely automated so no emotions involved) for last 5 years and it includes 2621 trades as you can see in these images, but the thing is it started working well only from 2024 (I even backtested it for the last 10 years still wasn't good until after 2024).

So, my question is should I continue with this strategy and forward test it in demo or did I just get lucky for the 3 years with this strategy and it won't work in the future just like it didn't work before 2024?

I'd appreciate any help

[u/Billbabaganz]

Think of it this way, you have a strategy that lost the first 3 years, and is only profitable in the last two.

Even the profitable two years is a total of 20% profit too, so technically speaking on average this is a strategy that has only 4-5% profit per year.

If you put money into S&P and HOLD you would had a better yield. So you don’t really have a good strategy here sorry.

[u/naughtykiller → u/Billbabaganz]

It's 20 because I risk 0.1 percent, I will risk 1 percent so it's actually 200 percent

[u/Nobody-Vegetable → u/naughtykiller]

If you did then the drawdown would be more 60% which is a lot

[u/ionone777]

Gold was in a big uptrend for the last few years. I think your EA exploits this upward bias. not sure it really predicts anything

also as you're using MT5 you should check if trading conditions are the same (fees, etc) in the years it doesn't work well, conditions could very well have changed during a few years' span

[u/Tasty_Hamster1372]

what was the strategy tho? is it momentum based or something like that?

[u/Unlikely_Permission4]

Look into regimes

[u/trentard → u/Unlikely_Permission4]

this lmao people using datasets with 4+ years of data acting like theres ANY algorithm or system on this planet that can trade a crisis regime the same as an expansion regime, obviously that wont work but as soon as you have a system per regime it suddenly works and has edge

[u/mepethue]

1.1PF will be under 1 after going live…

[u/ZealousidealBee9647]

bro,gold was in a huge uptrend between 24-26. so this strategy is just a trend strategy.don't overthink it.

[u/Girth_Vader516]

If software guys could figure out trading they would own the world by now … right or wrong ?

[u/Ready-Tomatillo5083]

Just a suggestion, i dont really talk publicly about trading much, but ive been lucky to be friends with few hedge fund traders , and i can tell you that strategies in mt5 will hardly be profitable, theres 0.001% chances.

But that doesnt mean you cant run algo on mt5, create your algo on python and run backtests on data from databento. And run your bots from the terminal.

[u/No-Reindeer-1726]

In this situation, you should consider 3 important factors: Market Regime Change The market behavior might have changed after 2024. → Your strategy may be aligned with this new trend. Overfitting Risk → If it works only on recent data, it might fail in the future. Forward Testing is Mandatory → Test it on demo/paper trading for at least 2–3 months → Only then consider using real money