Reading a trade history

By Otto Research 3 min read Article 39 of 95

The trade history is the list of every closed trade on an account: the instrument, direction, open and close times and prices, volume, commission, swap and profit. It is the only complete record of a strategy's behaviour, and everything else, the return, the win rate, the drawdown, is calculated from it.

Getting it out

In MetaTrader 5, the History tab of the Toolbox lists closed trades. Right-clicking allows the period to be set and the list to be exported as a report or saved to a spreadsheet format. A verified record on a third-party service provides the same list, usually with the calculations already done. For any serious assessment, get the raw list into a spreadsheet.

What to calculate

The basics: number of trades, win rate, average winner, average loser, expectancy, and the total after commission and swap. Then the shape: the equity curve, trade by trade; the maximum drawdown and its duration; the longest losing run; and the distribution of results, since a record where one trade produced half the profit is fragile in a way the averages do not show.

Then the behaviour: average holding time, and its range; the spread of trades across markets, since a "multi-market" record that made all its money in gold is a gold record; the time of day and day of week trades opened, which shows whether the strategy trades news, rollover or thin sessions; and, for every trade, whether a stop was in place from entry, which the history shows through the stop-loss column.

Worked example

A history of 320 trades shows a 44 per cent win rate, an average winner of £160 and an average loser of £82: a positive expectancy of about £24 a trade. The equity curve rises with two drawdowns of 11 and 15 per cent. So far, good. Then the detail: 212 of the 320 trades are in one pair, and 31 of them, all in a single month, opened within two minutes of high-impact releases and account for 40 per cent of the year's profit. The strategy is one pair, and a large part of its edge is news spikes on demo fills. On a live account, that month does not repeat.

What this means when an EA is trading

Read an EA's trade history before its summary, and read it for behaviour, not just results. The questions are: does every trade have a stop; are the trades spread across the markets and periods claimed; is the profit spread across many trades or concentrated in a few; do the holding times match the description; and does the equity curve include losing periods of the kind that the market will certainly deliver again.

A history that answers all of those well is worth more than any return figure. A vendor who will not provide one has answered the question already.

From theory to live

See it put to work.

The concepts on these pages are what Otto is built on. Watch it trade them live, on real accounts.