Why compounding makes every backtest look amazing
Fixed lots versus reinvested profits: how compounding changes an equity curve, and why fixed lots show the true edge.
Reinvest profits and increase the lot size as the account grows, and any strategy with a small edge turns into a curve that bends towards the sky. It looks impressive, but it mixes two things together: the quality of the strategy and the effect of growing position sizes.
Fixed lots show the edge
With fixed lots every trade is the same size from the first day to the last, so the slope of the curve is the edge itself. It is also the honest way to read drawdown: in a compounded test, a loss late in the history is measured in much bigger dollars than the same loss early on.
How we show it
The backtest in the app uses fixed lots taken from the same lot table the live bot uses for your balance and risk temperature. Nothing is reinvested in the figures you see.
Start the bot, watch your free $10,000 demo trade, and connect your Exness account when you are ready.
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Risk warning. Trading leveraged products such as CFDs carries a high risk of losing money. Backtest figures are simulations, not real results, and past performance does not guarantee future results. Read the risk disclosure before you connect an account. Nothing here is financial advice.