Comments on: Testing Backtesting: Why it doesn’t work http://forexmagnates.com/testing-backtesting-why-it-doesn%e2%80%99t-work/ Forex Magnates is the home of the Forex Elite providing up to date industry news coverage, commentary and scoops Sun, 12 Feb 2012 11:10:14 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jim Hunt http://forexmagnates.com/testing-backtesting-why-it-doesn%e2%80%99t-work/#comment-5147 Jim Hunt Wed, 03 Feb 2010 17:25:50 +0000 http://forexmagnates.com/?p=3063#comment-5147 Hi K, Wish I knew what that stood for! You've hit the proverbial nail on the head. As soon as your account can stand it a portfolio of different systems as well as different pairs is the way to travel (again IMHO!). I can only go so far with you Al. MM is a must, but one nice strategy is not really enough. Never rest on your laurels. Vary the mix as conditions vary. Backtest all you can!!! Jim Hi K,

Wish I knew what that stood for! You’ve hit the proverbial nail on the head. As soon as your account can stand it a portfolio of different systems as well as different pairs is the way to travel (again IMHO!).

I can only go so far with you Al. MM is a must, but one nice strategy is not really enough.

Never rest on your laurels. Vary the mix as conditions vary. Backtest all you can!!!

Jim

]]> By: K Adams http://forexmagnates.com/testing-backtesting-why-it-doesn%e2%80%99t-work/#comment-5146 K Adams Wed, 03 Feb 2010 15:18:38 +0000 http://forexmagnates.com/?p=3063#comment-5146 The price can only go up or down - the only thing that changes is the volatility. Last years live trading is today's backtest - of course it doesn't give me any guarantee as to what will happen this year, but it does at least prove my system or method has at least some merit, and is worth live trading in the current conditions. If conditions change notably I will change my system to an alternative one that handles the increased/decreased volatility better - as proven in previous years live trading which is of course today's backtesting. Far better to advise people to backtest in varying conditions and be aware of market changes - as one system won't 'fit all' - flexibility is paramount. The price can only go up or down – the only thing that changes is the volatility.

Last years live trading is today’s backtest – of course it doesn’t give me any guarantee as to what will happen this year, but it does at least prove my system or method has at least some merit, and is worth live trading in the current conditions.

If conditions change notably I will change my system to an alternative one that handles the increased/decreased volatility better – as proven in previous years live trading which is of course today’s backtesting.

Far better to advise people to backtest in varying conditions and be aware of market changes – as one system won’t ‘fit all’ – flexibility is paramount.

]]> By: Al http://forexmagnates.com/testing-backtesting-why-it-doesn%e2%80%99t-work/#comment-5145 Al Wed, 03 Feb 2010 14:30:14 +0000 http://forexmagnates.com/?p=3063#comment-5145 Chart patterns do exist, trends exist, psyc levels and much more. Backtesting hepls you to recognize these patterns and learn price behaviour. Of course there is not something like perfect strategy but you could find some 70% probability to succed, one nice strategy along with money management could lead you to succed. My advice..... backtest all you can!! Chart patterns do exist, trends exist, psyc levels and much more. Backtesting hepls you to recognize these patterns and learn price behaviour. Of course there is not something like perfect strategy but you could find some 70% probability to succed, one nice strategy along with money management could lead you to succed. My advice….. backtest all you can!!

]]> By: Jim Hunt http://forexmagnates.com/testing-backtesting-why-it-doesn%e2%80%99t-work/#comment-5144 Jim Hunt Wed, 03 Feb 2010 13:39:19 +0000 http://forexmagnates.com/?p=3063#comment-5144 Hi Michael, I beg to differ. If you are developing what you hope will become a profitable trading strategy backtesting is vital (IMHO!). It should be an integral part of your trading business, not merely an "educational tool" However backtesting in MetaTrader land is fraught with difficulties. For one example of this see: http://trading-gurus.com/the-metatrader-4-backtesting-blues-track-1/ Cheers, Jim Hi Michael,

I beg to differ. If you are developing what you hope will become a profitable trading strategy backtesting is vital (IMHO!). It should be an integral part of your trading business, not merely an “educational tool”

However backtesting in MetaTrader land is fraught with difficulties. For one example of this see:

http://trading-gurus.com/the-metatrader-4-backtesting-blues-track-1/

Cheers,

Jim

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