Algo Trading Space Trading & Backtesting Framework

Complete workflow for EA testing, risk management, and live trading

📊 Rules for Accounts

We want to test the EAs on Real trading conditions

1 Demo Testing
Once we find a new EA we place it on a Demo account for initial evaluation We start testing on a Demo IF the EA has 2 out of the 3 things:
  • Free Trial
  • 30-day money-back guarantee
  • Verified track record
2 Backtest Requirements
Backtest IF the EA on Demo meets these criteria:
  • Makes over 2% a month
  • Has over 30 trades
  • Trades over 30 Days
3 Decision Point
Based on the results, we decide if the EA will be traded on a live and/or on a funded account
✓ Funded if DD is below 10%
✓ Live account if DD is below 50%

🎯 Goal: 100 accounts with 100 EAs

Accounts
  • Max 5 Real-money accounts per EA
  • $200 / $500 / $1000 live accounts
  • iFunds / Xrading / Darwinex Zero funded accounts
Risk Management
  • 50% Max DD for Grid/Martingale
  • 25% Max DD for Fixed (not grid) Lot Trading (EAs)
  • 10% risk for Funded accounts
Targets
  • 20% Target Withdrawal
  • 3 Months Withdrawal cycle

Account Size Strategies

$200
  • Gold - fixed 0.01 lot
  • 1 FX Pair max. - fixed/limited grid
  • 100% Max DD
  • 50% withdrawal
$500
  • Gold - grid with 0.01 lot
  • 1 FX Pair max. - a few recovery orders (3-4 max)
  • 20% Target Withdrawal
  • 50% DD
$1000
  • One symbol - Grid martingale
  • If more than 1 pair: Separate into different $1k accounts each pair
  • Or 3 Pairs or EAs - min deposit is $3k

🔬 Rules for Backtesting

1 Monitor Performance

Continuously monitor the performance of live accounts

⚠️ If the account trades over 90 days and performs less than 2%, evaluate the backtest to see if risk can be increased
⚠️ If the account trades over 90 days and makes over 5% a month, lower the risk - 2% is enough!
Demo
  • Backtest only if it makes 2% a month or profit factor of >1.2 for over 30 days and 30 trades
  • Start demo with vendor recommendations OR $10k with 0.01 fixed starting lot size
  • Compare the results with the Demo
Backtesting
  • Evaluate the DD on $10k with 0.01 fixed starting lot size
  • Increase the lots on each backtest to see if it will fulfill our requirements
Qualification

EA qualifies for live trading if:

  • DD is below 50%
  • Min 2% a month
  • Safety factor > 1.5
  • Annual DD > 1.10
If the EA has low DD & low monthly profit, create a portfolio from a few uncorrelated pairs

Risk Configuration by Account Type

Account Type Target Monthly Return Max Drawdown
Live 2% 50%
Funded 1% 10%
Prop Firms 1% 6%

🏦 Funded Account Trading Rules

Strategy breakdown for iFunds and Xrading accounts

iFunds Strategy
Target
Monthly target 1%
Annual projection 12%
Structure
  • Portfolio of 3 EAs per account
  • Applied on a $10,000 live account
  • Account cost: $700
Profit Expectations
12% annual return $1,200 total profit
Profit split 50%
Net profit for us $600
Annual return represents approximately 85% of the initial account cost ($600 return on a $700 investment). The objective is steady, controlled growth — prioritizing stability over aggressive scaling.
Xrading Strategy
Base Target
Monthly target 1%
Overall challenge target 20%
Scaling Approach
  • When portfolio reaches +5%, risk is increased 2x
  • Max drawdown remains fixed at 15% (static DD rule)
Projected Timeline
First 5 months @ 1%/mo → 5%
Next 7 months @ 2%/mo → 14%
Total after 12 months ≈ 19%
This approach allows realistically reaching the full 20% target within approximately 12–13 months, while maintaining defined drawdown limits.

🎯 Set Risk Strategy

Look for 2-3% a month with decent Safety Factor

Might use AI to analyze how much the total DD is if it is a portfolio of pairs

🧠 Right Mindset

1 Always Test on Demo First
Test any EA on a Demo account, even if the ATS team tested it
2 Start with Lowest Risk
Start with the lowest risk possible on a Live account
3 Build a Diversified Portfolio
Build a portfolio of EAs and different types of accounts

Portfolio Allocation Strategy

70%
Live Trading
20%
Funded Trading
10%
Prop Firms

✅ Final Check

1 No Stress

If you feel worried or concerned about the account, then you are taking too high risk!

Lower the risk to trade stress free

2 Accept Losses
  • Realistic expectations - Know what to expect
  • Know how much you can lose - Set clear limits
  • Accept the losses - They are the costs we pay to learn. School fees.
3 Manage Gains
  • Withdraw Regularly - Lock in profits
  • Reinvest or Spend - Use your profits wisely
  • Keep Diversifying - Continue building your portfolio