Backtest vs. Forwardtest

We want to show you why backtesting a strategie isn´t the holy grail.  It suffers from a number of limitations that become particularly obvious when you're testing expert advisors like Fapturbo or Megadroid that use relatively small profit targets.  The problem we're demonstrating today is that MT4 only keeps the bid price in it's store of historical data.  It doesn't store the ask price, so when it's doing a backtest it has to make a guess at the ask price for every tick. To do that it adds the spread to the bid price it has got safely stored away.  Of course it has no idea what the spread actually was for your particular broker at that particular time in the past, so it guesses that too. It uses the spread the MT4 client terminal is displaying at the time you press the start button on the strategy tester.  This might have made a bit of sense in the good old days when MetaTrader forex brokers offered fixed spreads, but in this modern age of floating spreads and straight through processing it means that MetaTrader 4 strategy tester backtest results for scalping strategies are not far short of useless.

Only a forwardtest with a live account can show you if a strategy is reliable or not.