In the course of the 18-month backtesting window, our trailblazing trading algorithm demonstrated exceptional prowess in pinpointing and capitalizing on profitable trade opportunities, boasting an impressive win rate of 69%. The average trade duration clocked in at 1 hour and 35 minutes, showcasing the algorithm's focus on exploiting short-term market shifts with precision.
Throughout the backtest, the total return climbed to a remarkable $23,701, while the maximum drawdown remained contained at $1,070, or 10.7% of the initial balance. These metrics underscore the algorithm's finesse in striking an equilibrium between risk and reward, fostering a controlled trading environment.
The algorithm's outstanding performance is further reinforced by a robust Sharpe ratio of 5.68, denoting a compelling risk-adjusted return. The risk-reward ratio remains advantageous, with the average winning trade reaping $160 in profit and the average losing trade incurring a loss of $129. The profit factor of 2.85 illustrates the algorithm's capability to generate returns that are 2.85 times greater than its losses.
To wrap up, our trailblazing algorithm has delivered extraordinary performance in the XAU/USD 5-minute backtest, conducted from November 2021 to April 2023. These results emphasize the algorithm's capacity to consistently yield profits, adeptly manage risk, and seize short-term market opportunities. It is essential to bear in mind that past performance may not always predict future outcomes, and real trading conditions can be subject to variation due to factors such as slippage, commissions, and other trading costs.