Spreads and my automated strategy

[Tarki]

Hi Folks,

i'm back again with some newbie questions =).

I managed to develope a strategy which is relatively successfull (in backtesting) on forex (EUR/USD).
Nearly to successfull, which got me thinking, maybe my settings or my understanding of the backtesting is not correct.

I'm not sure about how to include spreads in a correct backtest simulation.
Is the slippage here correct? Let's say my broker has a 1 Pip spread. What's the correct setting in NT?

If i'm using my strategy without slippage i've got a really nice roi on the whole lot size.
With slippage however (slippage of 1) i'm in the red - no profit here.

Is slippage the correct setting for spreads ?

I too only use enterlong or short commands. Don't use limit's, only emergency stopps.
Are for this case slippage or spreads relevant? The problem is see in addition is, that backtesting only use bar data and no tickdata. Is there a way to include spreads?

Maybe you could correct my thinking. Big thanks and a nice evening.

Greetings
Tarki

[NinjaTrader_Lance]

Slippage can play a big factor in your trading results, especially when using market orders for both the entry and the exit.

A slippage of 1 will apply 1 tick of slippage to all market orders. (2 ticks total per trade if one entry and exit are made with a market order)

Additionally when backtesting you'll likely only have access to the last traded price. If you're trading an instrument with largely different ask/bid prices, your backtest fills could vary greatly from how your broker would have filled you in real time.

The best way to understand how real time market orders will fill in a given market is only through experience. There is no "correct" setting. The following link provides some more useful information for explaining these differences: http://www.ninjatrader.com/support/h...ime_vs_bac.htm