Adjusting leverage for backtesting

Created at 05 May 2023, 12:10
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lookitsben

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Joined 05.05.2023

Adjusting leverage for backtesting
05 May 2023, 12:10

Hi there,

I'm using IC Markets, connected to cTrader and am looking at trading crypto. IC Markets informed me that leverage for Bitcoin is max 5X, however when I backtest, I think it is using my 500X default leverage for my account, rather than the 5X (image below).

Is this the case? Am I able to manually adjust the leverage to ensure more accurate backtesting?

Thanks!

Ben

 

@lookitsben
Replies

PanagiotisChar
08 May 2023, 07:50

Hi Ben,

The image does not show anything specific. What are we supposed to see?

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@PanagiotisChar

lookitsben
08 May 2023, 11:50

RE:

 

Hi, thanks for your reply, the screenshot shows that my leverage is 500X on Bitcoin, but on the IC Markets website, it says that the cTrader in combination with IC Markets only offers 5X leverage.

Is it true that they only offer 5X for crypto? And if so, am I able to manually adjust the leverage to ensure more accurate backtesting?

Thanks!

Ben

 

 

​

 

@lookitsben

PanagiotisChar
08 May 2023, 11:57

Hi Ben,

The image shows the account's leverage which is the max leverage permitted for this account. Individual symbols can have lower leverage. So if Bitcoin's leverage is 1:5, this is what you will get regardless that your account allows for a higher leverage.

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@PanagiotisChar

lookitsben
09 May 2023, 12:28

RE:

 

Thanks for the additional detail! Doesn't this make back testing very complicated and potentially not comparable to real trading?

For instance, how do we know what leverage is being represented in the backtest (in the Bitcoin example: 5X or 500X), and I assume that the margin usage calculation is dependent on the leverage too?

As someone quite new to this, hopefully I've missed something :) would be great to hear your thoughts!

@lookitsben
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