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A strategy test is easy to do. It doesn’t cost anything. It is not very complicated. But most people prefer to throw their money into some dark hole and hope for the best.
Trading is easy to try, easy to understand, but often hard to do when it is real money.
Each trader has his or her own comfort zone. And after something is successful, everybody would like to have traded it this way. From time to time I get a question like: why should I trade what you trade? Well, maybe you shouldn’t do that.
I think that the best possible way to improve trading results is to do a lot of tests.
Every back test will produce a measurable result. Is it better or is it worse? You don’t have to guess. You can compare the numbers.
Some traders are bored and now they want to open a position for the excitement. Or maybe they are greedy and now they increase their risk.
Some folks don’t have any problems to see a high drawdown to make better profits. But other people can’t stand to see that.
If you could create a better version of you when it comes to trading, would you be willing to invest five minutes a day?
You always can change one thing and repeat the test. If you get better results, you go with the new version. If you get worse results, you try something else.
It is easy to find out what would have happened. The only thing you need to do is to use an algo trading system.
I have seen systems doing 20,000 and more trades in the strategy tester within a few minutes. That is real trading experience in a fraction of the time.
Would you think that it is possible to cause a car crash if you drive on the highway with just 5 mph? That is probably easy to answer.
The really important test is always how things work out on a real account.
I think the best solution is the one that fits like a custom tailored suit. You need to find out what works for you.
The current price can go up, it can go down and it can go sideways. So why is it so hard to predict the right direction?
Defined strategy tests are a good way to find out what works because there are so many things that influence the outcome.
I don’t waste my time with things that don’t work. I have no idea why. I have no passion for sports cars and I don’t try to fix that. I am simply not interested.
We all want an expert and we are willingly paying good money for experts that can achieve good results and save us time due to their experience.
I started to learn all that trading stuff and it took me a few years. I will never use all of the functions that are included. Actually, I have taken out a tiny fraction.
If you have traded others systems you might already be familiar with the back testing process.