Setting	Value
Expert Advisor	EA-040_Two-Candle_Continuation
Symbol	XAUUSD.PRO
Timeframe	M1
Test Period	2026-01-02 → 2026-04-01
Initial Deposit	$1,000
Currency	USD
Leverage	1:500
History Quality	100% real ticks
Bars	86,539
Ticks	40,346,891

The Strategy Tester report confirms the EA, symbol, timeframe, test period, initial deposit, leverage, and 100% real-tick history quality.

EA Parameters

Parameter	Value
Lot Size	0.01
Stop Loss	300
Take Profit	600
Magic Number	123456
Slippage	10
Maximum Spread	30
Break Even	Enabled
Break Even Start	150
Break Even Shift	10
Trailing Stop	Enabled
Trailing Start	200
Trailing Step	50
Fast MA	20
Slow MA	50

Performance Summary

Metric	Result
Total Net Profit	-$993.54
Gross Profit	$7,245.01
Gross Loss	-$8,238.55
Profit Factor	0.88
Expected Payoff	-$0.21
Recovery Factor	-0.97
Sharpe Ratio	-5.00
Max Balance Drawdown	$1,023.27 (99.37%)
Max Equity Drawdown	$1,023.27 (99.37%)

The strategy generated a net loss of $993.54 from the $1,000 starting balance, with maximal balance and equity drawdown reaching 99.37%.

Profit Factor was 0.88 and Expected Payoff was -$0.21 per trade. Recovery Factor and Sharpe Ratio were also negative.

Trade Statistics

Metric	Result
Total Trades	4,630
Total Deals	9,260
Winning Trades	1,980 (42.76%)
Losing Trades	2,650 (57.24%)
Short Trades	2,212
Short Win Rate	41.00%
Long Trades	2,418
Long Win Rate	44.38%
Largest Winning Trade	$32.66
Largest Losing Trade	-$26.02
Average Winning Trade	$3.66
Average Losing Trade	-$3.11
Maximum Consecutive Wins	9
Maximum Consecutive Losses	14

The backtest generated 4,630 trades. 42.76% were profitable while 57.24% were losing trades.

Average profit per winning trade was $3.66 compared with an average loss of $3.11. The longest losing sequence reached 14 trades.

Position Holding Time

Metric	Result
Minimum	00:00:01
Average	00:03:05
Maximum	03:38:01

The strategy operated primarily as a short-duration M1 trading system during this test.

Backtest Result

FAIL

The current EA configuration does not pass baseline profitability validation.

Primary reasons:

Total Net Profit: -$993.54
Profit Factor: 0.88
Winning Trades: 42.76%
Losing Trades: 57.24%
Maximum Drawdown: 99.37%
Expected Payoff: negative
Sharpe Ratio: negative

The balance curve shows a substantial long-term decline and the account finishes close to depletion.

This configuration should therefore not be treated as a validated trading configuration.

Research Interpretation

This result is still useful as the baseline benchmark for EA-040.

The EA successfully produced a large sample of 4,630 trades using 100% real ticks.

The baseline result indicates that the current combination of:

Two-candle continuation signal
SMA 20 / SMA 50 trend filter
SL 300
TP 600
Break Even
Trailing Stop

does not produce acceptable results under this specific XAUUSD.PRO M1 test configuration.

The next research stage should investigate which components are responsible for the negative expectancy before parameter optimization is attempted.

Current Status

EA implementation        COMPLETE
        ↓
Baseline backtest        COMPLETE
        ↓
Baseline result          FAIL
        ↓
Strategy research        NEXT

Baseline FAIL does not mean the research project failed.

It establishes the reference result against which future EA versions can be compared.

Files

Backtest/
└── EA-040_Two-Candle_Continuation/
    ├── README.md
    ├── ReportTester-952747.html
    ├── ReportTester-952747.png
    ├── ReportTester-952747-hst.png
    ├── ReportTester-952747-mfemae.png
    └── ReportTester-952747-holding.png

The HTML Strategy Tester Report should be retained as the primary evidence for this baseline backtest.

Conclusion

EA-040 Two-Candle Continuation — Baseline: FAIL

The baseline strategy is not profitable under the tested XAUUSD.PRO M1 configuration.

This backtest should be preserved as the baseline benchmark for subsequent research and EA revisions.