Back testing profitability query

Tidd83 · 2026-10-18T08:17:00+00:00

Hi all, First post here to the forum. I was curious what target profit you look for that would be considered healthy on a backtest with a decent equity curve before running the strategy as a live demo. I am running the demo account with a 200k unit backtest on the 1min chart so approx 6.5 months. I understand this may not be as long as many but markets fluctuate and change so I’m comfortable with this historic period whilst comparing against the future. Thanks

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10/18/2026 at 10:17 AM #265665 quote

Tidd83
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Hi all,

First post here to the forum. I was curious what target profit you look for that would be considered healthy on a backtest with a decent equity curve before running the strategy as a live demo. I am running the demo account with a 200k unit backtest on the 1min chart so approx 6.5 months. I understand this may not be as long as many but markets fluctuate and change so I’m comfortable with this historic period whilst comparing against the future.

Thanks

10/18/2026 at 5:36 PM #265667 quote

robertogozzi
Moderator

Legend

You may choose a fixed SL and TP, irregardless of the current market behavior, or you may set your SL to, say, the prior bar’s low or the lowest low among the last N bard (Long example).
Or you may choose to set ot according to Fibonacci retarcements and pullbacks or whatever other way you may prefer.
Even your TP can either be fixed or a multiplier of your SL, or a Fibonacci extension, a reverse crossover etc..
I don’t think there’s a prevailing correct method. I suggest not to exceed your risk aversion and manage both your SL snd TP according to your Capital and never adjust it to the way a trade is performing, but let it be hit. If your strategy is good, it will have the time to recover one or more losses, with no hurry.
t will have the time to recover one or more losses, with no hurry.

10/18/2026 at 6:13 PM #265669 quote

Tidd83
Participant

New

Hi Robert, thanks for the reply.

I wasn’t referring to specific trades more on the terms of a full back test i.e on a £10k demo account a return of 20% for example from a backtest on a 6 month basis would be considered excellent, mediocre?

10/18/2026 at 7:49 PM #265670 quote
JS
Participant

Master
Hi,
The “problem” with your question is that you’re focusing solely on returns…
Judging a trading strategy based on returns alone is a bad idea…
There are several other factors that are at least as important, if not more so, such as:
- What is the maximum drawdown?
- How much risk is being taken to achieve those returns?
- How robust is the strategy across different market conditions?
- Have spread, commissions and overnight financing costs been taken into account?
- How many trades were executed during the backtest period?
- Are you trading CFDs with leverage?
If I saw a 20% return over six months, my first reaction would be, “that’s a very nice return!”…
However, without answering the other questions first, the return itself tells you very little about the actual quality of the trading strategy…

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