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My computer can calculate and trade entry signals in a split second. If I would try to do all the calculation in my head, I wouldn’t even be able to do a back test for a single year or a single currency pair. In January 2015, the forex market went crazy. I have never seen bigger candles on my charts before.
Do you like surprises? I think actually most people would say yes. But indeed not all surprises are good.
Historical data does not need to be imported. It is automatically downloaded when you start a back test for the first time. You don’t have to expect that one trade might make or break your system because you do hundreds of trades.
The entry signal is exciting, so people keep talking about it. But from my experience, it is not what will make or break a good algorithmic trading system.
I have found one thing that is very significant and a great advantage if you only do one thing. You should really do this process with position based stop losses because you will find that your stop loss settings have the biggest impact on your trading results.
When you compare 100 traders, one of them will have the best results and one of them will have the worst results. The only thing that can answer the competence question is: can you repeat the results on a consistent basis?
Humans are emotional creatures, otherwise nobody would watch any movie because you simply wouldn’t be interested in what happens to the actors.
Most of the time, bad problems occur at the very worst time and several unexpected things come together.
You could manually trade your strategy with historical data. So I tried to do that and it was a frustrating experience for me. Humans tend to make emotional decisions because of the way we feel.
Some currency pairs work better than others. In the past, I always wanted to know the reason.
It is a good idea to do a lot of back tests to find out what the worst possible outcome would have been in the last eight years or so. If you can do what it takes, you might become one of the chosen few to beat the financial industry empire.
To be able to do dangerous stunts, you need to train very hard and you need to enjoy the process. But this is not for me. How would you make a profit? So what do you need to do to protect your trading system? Well, you need to build your trading ship in a way that you are able to face all weather conditions, not only the warm summer days with a light breeze.
Some things just don’t work very well. Hope trading is one of these things.
There are dozens of different indicators and hundreds of strategies that we can use.
We want to make good profits with as little risk as possible and we want to feel good.
We have a premium course about how to build your system. Actually, it is not only a particular system, but rather a framework where you can plug in any entry signal you like.