what the 99% in the strategy tester really means

[Shadow Trader]

That modelling quality figure in the MT4 strategy tester looks like a grade. It is not a grade of the strategy. It is a rough measure of how much of the test period was covered by real tick data, and the stock tester usually tops out around 90%. The 99% figure normally appears only after tick data from a third party gets imported.

Here's the mechanism. Brokers typically supply one-minute bars, not every tick. In "every tick" mode the tester fills the gaps between bars with generated ticks that follow a fixed pattern from open to high, low and close. Real price doesn't move like that. It stalls, spikes and reverses in ways that matter a lot to a scalper aiming for 3 pips.

The percentage also says nothing about spreads. Many tests run with one fixed spread for the whole period, while live spreads widen around rollover and news. A system that wins 60% of its trades at a fixed 0.8 pip spread can look very different at 1.8.

MT5 can test on real ticks collected from the broker's server, which is closer to reality, though history length and gaps depend on the broker.

So a beautiful report on tiny targets deserves suspicion. The smaller the target, the more a few tenths of a pip of tick error decides the result.

Have you ever run the same system on generated ticks and on real ticks, and how far apart did the profit factor land?