Testing a strategy’s historical performance (backtesting) can be a useful method to check it’s potential. However past performance is no clear indication for future performance. Markets are constantly changing, going through different trends or periods without strong directional conviction. Let’s look at an example of a strategy for demonstrational purposes. It’s not meant to be traded and the historical performance is hypothetical and can’t be reproduced in a real market environment. During the major bull trend at the end of the previous century and into the millennium the demo strategy displays a positive return. The strategy equity curve is almost reflecting the chart and starts to decline, after the market topped, too.