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Everything you need to know about backtesting: The Proper configuration of MT4

Everything you need to know about backtesting – The Proper configuration of MT4

We could easily think that backtesting in MT4 is a very simple process: We just need to open the strategy tester, set the time period of the test, and a few minutes later we will get the performance of our EA.

But the question is: will we get reliable test results?

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What is slippage, and what effects does it have?

What is slippage?

Slippage is the difference between the requested price of a trade and the price where the trade was actually executed.

There are two types of slippage:

Market slippage, and
Stop-loss slippage.

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Operational risk: A thing that can ruin your success

Operational risk in forex markets

Even the best forex strategy can be ruined by operational failures. The hazard of these errors occurring are called operational risk, and this kind of risk is well known among professional or company traders.

We would like to illustrate this with an example:

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