The most important
- No two sets of tick data are alike. Even if the quality is 99.9%, the data seems to be different from one broker to another, so don’t focus on a single agent or data set and try to see the whole picture.
- As a consequence of the above statement, we decided to test DooZER with tick data from various brokers/providers.
- Always backtest with 99.9% quality data. Don’t trust bacl tests with worse quality tick data.
- We decided to challenge DooZER with 5 years of tick data, from January 2018 to the present (as of this writing, late September/early October 2022).
- The spreads used for the test are the average spreads typical of a raw spread account at IC Markets (unapproved), which is the broker where our demo and live trading accounts are located.
After a first round of backtesting, we quickly realized that there were two currency pairs that stood out across the vast number of currency pairs (and even metals!) we tested. These two pairs are EURUSD and EURCHF. The first is no mystery: the most traded currency, with many good trading opportunities. The second, however, was a surprise. It gave DooZER a very interesting way to trade without the crazy highs and lows of other pairs like the Japanese Yen. Therefore, we began to do a much more intensive round of backtesting focusing only on these two pairs. That said, while the EURCHF pair was very interesting to trade, it made half the profits of the EURUSD. Again, no surprise. It may not be a currency pair to trade on its own, but as a second pair to trade along with the EURUSD it is perfect. However, only recommended in the M30 timeframe. The M1 was too fast for the coin and didn’t do that well.
Thoughts out loud
- EURUSD,M1 was very consistent throughout the tests performing well. Also, we noticed the same in our live tests and thus EURUSD,M1 is one of our recommendations.
- If you prefer a quieter trade with less risk (although also less potential profit), we recommend the EURUSD on the M30 time frame. It worked well and looked very solid on all data.
- EURCHF is something we can recommend on the M30 time frame if you want to open a second chart along with EURUSD, M30.
- EURUSD, M1 should trade alone. Adding a second chart is something we don’t recommend.
- We’ll be keeping an eye on the exotic EURSGD, which did surprisingly well in our tests, and the NZDCHF cross, the latter with some interesting results in some of the tests, and has some potential as a companion to the EURUSD in the M30. Make sure your runner has a good spread though, as they are a bit unusual.
- Other coins sometimes did well and sometimes not, depending on the broker’s data. They gave inconsistent and inconclusive results, and we cannot recommend them.
(All subsequent tests were performed with 99.9% quality data from the commercial Tick Data Suite software)