This python code backtests simple forex trading strategy using 1h candlesticks data from 2009 to present. Strategy:just open long after bullish candlesticks and open short after bearish candlesticks. Initial balance: $100 Risk: $1 Stoploss: -5pips Take profit: +15pips The result shocked me if code outputs correct result there is 20000% profit. Does this code outputs correct backtest results? import pandas as pd # === 1. Load Data === file_path = "/storage/emulated/0/Download/EURUSD_H1.csv" column_names = ['Time', 'Open', 'High', 'Low', 'Close', 'Volume', 'Extra'] df = pd.read_csv(file_path, sep="\t", names=column_names, skiprows=1) # === 2. Prepare Data === df['Time'] = pd.to_datetime(df['Time']) for col in ['Open', 'High', 'Low', 'Close']: df[col] = pd.to_numeric(df[col], errors='coerce') df = df.dropna(subset=['Open', 'High', 'Low', 'Close']).sort_values('Time').reset_index(drop=True) # === 3. Trade Parameters === pip = 0.0001 take_profit = 15 * pip stop_loss = 5 * pip holding_period = 1 # <-- Only 1 hour risk_per_trade = 1 pip_value = risk_per_trade / (stop_loss / pip) initial_balance = 100 balance = initial_balance # === 4. Backtest === trades = [] i = 1 while i < len(df) - holding_period: row = df.loc signal = 0 if row['Close'] > row['Open']: signal = 1 # Buy elif row['Close'] < row['Open']: signal = -1 # Sell if signal != 0: entry_price = df.loc[i + 1, 'Open'] entry_time = df.loc[i + 1, 'Time'] j = i + 1 high = df.loc[j, 'High'] low = df.loc[j, 'Low'] close = df.loc[j, 'Close'] exit_time = df.loc[j, 'Time'] if signal == 1: # Buy if high - entry_price >= take_profit: trade_result = take_profit elif entry_price - low >= stop_loss: trade_result = -stop_loss else: trade_result = close - entry_price elif signal == -1: # Sell if entry_price - low >= take_profit: trade_result = take_profit elif high - entry_price >= stop_loss: trade_result = -stop_loss else: trade_result = entry_price - close pnl_pips = round(trade_result / pip, 1) pnl_dollars = round(pnl_pips * pip_value, 2) balance += pnl_dollars trades.append({ "Entry Time": entry_time, "Exit Time": exit_time, "Direction": "Buy" if signal == 1 else "Sell", "PnL (pips)": pnl_pips, "PnL ($)": pnl_dollars, "Balance After": round(balance, 2) }) i += holding_period # move to next bar else: i += 1 # === 5. Summary === total_profit = round(balance - initial_balance, 2) total_trades = len(trades) wins = sum(1 for t in trades if t["PnL ($)"] > 0) win_rate = round(wins / total_trades * 100, 2) if total_trades > 0 else 0 # === 6. Print Results === print("Backtest Summary (1h Hold, Bullish = Buy, Bearish = Sell):") print(f"Initial Balance: $100") print(f"Final Balance: ${round(balance, 2)}") print(f"Total Profit: ${total_profit}") print(f"Total Trades: {total_trades}") print(f"Win Rate: {win_rate}%") print("\nSample Trades:") for t in trades[:5]: print(t) Continue reading...
