Making back testing realistic

ForexHero

Junior member
10 1
Hello, I'm going to try and back test a few trading ideas. I want to make the back testing as realistic as possible so want to know what to do with the SPREAD. (I do spreadbetting).

So say I'm looking at a currency pair.

Opening position is 1000

I BUY £1 per pip

My stop loss is set at 50 pips so will be stopped out at 950 (lose £50)

My limit is set at 100 pips so will take profit at 1100 (£100)

So do I just follow the candle charts for as long as they travel make a note of what profit (£100) or loss (£50) I make? Is that realistic?

Or do I adjust my stop loss?
Let's say the spread is £10. So when I place the trade my entry point on the candle chart will be at 990 (and I will be -£10).

If I win I will still make £100 and if I lose I will still lose £50 but I'm starting on -£10 because of the spread.

So to make the back testing feel more realistic do I set the stop loss at 40? Or leave it at 50?


Thank you
 

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