Easy answer. You paper-traded those profits. Anyone can make money on paper. I turned 20k into 700k TWICE on virtual stock exchange. (inside 6 months)
All can't make money of paper. Validity of the system depends on the complexity (e.g. the more complex the system the less likely it will work in the future) and already mentioned number of trades. Suggest you backtest on different markets and with more historical data. I think you'd need double (triple?) that annual return with the same risk profile to call it a holy grail
I know the strategy you are using. Add commissions and slippage and it dies. Add more people who know about it and you'll be losing money on it. Next!
Hows it done ? Easy ! The software determines the buy and sell signal at the end of the bar and you code the software to buy and sell at the beginning of the bar. Then take out the commissions.... Very easy with smoke and mirrors dumbguy.
You are kind of missing a few stats aren't you? Profit Factor? Sharpe? In 2001, when at a low point, atarting there to leverage the market heavily could also achieve 100% annually, with one trade Hold&Hope systems on hundreds of backtests don't have much value...
Along with the other comments that this strategy doesn't take into account real trading, I'd add that we can't comment on it because there isn't enough posted about it. So let's end this discussion and turn to trading strategies that give us some meat on the bones.