@Desita-Hey there! I honestly tried to get out testing on Demo and only using Petko’s system of the OOS, but I just couldn’t confidently let it go. I guess this may be considered overly cautious, but I really don’t like waste time or money. So I do a combination of both.
I generate the strategies using my broker’s live historical data and include the updated criteria that Petko showed using the R-squared and 30% OOS. I then take these strategies and run them through the MT strategy tester (since I am using MT5, it might be a bit different for those on MT4). I analyze the last 10 trades to see if the win/loss is still at 70% or above.
For example..strategy generated and ran through tester shows a total count of trades to be 125. I go back to trade 110 (not 115) to analyze and see if 70% win/loss performance is maintained. From there I check the win/loss performance of trades 120-125. Lets say it is 4-1 in winning trades at this time. I then put this EA in demo for the next 5 trades to complete another 10 trade analysis. If it maintains losing more than 2 trades out of the next 5 trades, then this has maintained the 70% winning performance and passed demo testing. Potentially this is an EA that I could start live trading. There are other factors I look at as well before immediately putting them on, like profit factor, # of pips moved, etc.
Let’s take this same scenario and have it start off as a losing strategy, for instance it is sitting at 2-3 in winning trades. This means that it cannot have any more losses out of the next 5 trades to pass my demo criteria. Sometimes they pass and sometimes they don’t. But I have found that being this strict has helped me to avoid some major catastrophes.
Hope this helps.