Over the 17-month backtesting period, our highly sophisticated trading algorithm demonstrated its proficiency in capturing profitable trading opportunities, achieving a win rate of 63%. The average trade duration was 1 hour and 33 minutes, reflecting the algorithm's ability to efficiently exploit short-term market trends.
During the backtest, the total return amounted to an impressive $11,652, while the maximum drawdown was limited to $709, or 7.09% of the initial balance. These figures emphasize the algorithm's effectiveness in balancing risk and reward, ensuring a more stable and controlled trading experience.
The algorithm's performance is further accentuated by a Sharpe ratio of 3.59, indicating a solid risk-adjusted return. The risk-reward ratio remains positive, with the average winning trade generating $114 in profit and the average losing trade resulting in a loss of $99. The profit factor of 1.99 demonstrates the algorithm's capacity to yield returns that are 1.99 times greater than its losses.
In summary, our algorithm has delivered exceptional results in the AUD/USD 5-minute backtest carried out from December 2021 to April 2023. These results showcase the algorithm's ability to generate consistent profits, effectively manage risk, and take advantage of short-term market opportunities. It is important to note that past performance may not always be indicative of future results, and real trading conditions can vary due to factors such as slippage, commissions, and other trading expenses.