How many times should you test an algo?

XTX Markets' Matt Clarke evaluates how often traders should test an FX algo to understand its outcome

sterling dollar chart

The role of luck – both good and bad – is commonly underappreciated in the world of algorithms. Many traders will try an algo five times and then form a strong opinion based on what they have observed. But is this reasonable?

In the following thought experiment, this opinion piece focused on a single currency pair – sterling/US dollar – and chose three order sizes: 10 million, 50 million and 100 million.

We randomly selected 10,000 order start times over the past few months then flipped a

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact customer services - www.fx-markets.com/static/contact-us, or view our subscription options here: https://subscriptions.fx-markets.com/subscribe

You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to FX Markets? View our subscription options

You need to sign in to use this feature. If you don’t have a FX Markets account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: