FOREX Contract Sizes in Portfolio BackTester

Hi,

I was running a backtest for a strategy based on a data stream from Interactive Brokers. However, when I run the backtest and look at the performance report it gives me a large value for number of contracts (>4000) even though the maximum capital I have allocated for trade is $5000. Since ForEx contracts are usually larger than 1 unit how would I change this? Also, I get a account size required value of under $500 for this trade without using margins. Does anyone know why this would be?

Any help will be greatly appreciated.

Thanks,

You need to specify the amount of contracts you want to buy in Porfolio Backtester.
Please make a right click on the strategy name in the Portfolio Tree at the left-> select Show properties.

Once you specify the proper amount or contracts according to your lot size and backtest it - account size required will be recalculated.

Hi Henry,

When I change the contracts to say 1000, I still only get a cash requirement of around $500. The performance report says it bought 1000 contracts at a price of 1.44485 each, so I can't figure out why it is giving me such a low cash requirment when I'm not leveraging my position.

Thanks

Account size requirement is the amount of money you need to have on your account (besides the initial trading capital) to compensate the drawdown. It is the warranty provision to avoid margin call. The calculation is simple: abs(MinCloseToCloseDrawDown).