Throughout this 17-month backtesting period, our advanced trading algorithm exhibited solid performance and consistent profitability. The strategy's win rate reached an impressive 69.4%, reflecting its competence in identifying and capturing the majority of lucrative trades. The average trade duration stood at 1 hour and 29 minutes, showcasing the algorithm's ability to effectively leverage short-term market fluctuations.
During the backtest, the total return amounted to $366, while the maximum drawdown was limited to $900, or 9% of the initial balance. These figures underscore the algorithm's adeptness in balancing risk and return, ensuring a more stable trading experience.
Further emphasizing the algorithm's performance is the commendable Sharpe ratio of 4.21, which points to a strong risk-adjusted return. The risk-reward ratio remains positive, as the average winning trade produced $129 in profit, and the average losing trade incurred a loss of $111. With a profit factor of 2.62, the algorithm demonstrates its capacity to yield returns that are 2.62 times greater than the losses it incurs.
To sum up, Breakfree Trading's algorithm has showcased exceptional results in the EUR/USD 5-minute backtest carried out from December 2021 to April 2023. The algorithm's ability to generate consistent profits, manage risk effectively, and take advantage of short-term market opportunities is evident in these results. However, it is essential to remember that past performance may not always predict future outcomes, and real trading conditions can vary due to factors such as slippage, commissions, and other trading expenses.