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Forex Trading - Backtesting Strategy
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Pending: 10
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Lack of strategy backtesting and confidence leads to blown accounts or giving up on trading, despite the significant time investment in backtesting.
"The reason there are so many people that give up and either blow an account because they didn't back..."
Jan 12, 2016
Pending
Effective strategy use in trading requires extensive backtesting by reviewing historical charts (5-15 years, higher timeframes) to identify patterns, track trade outcomes (wins/losses, stops/targets), and understand average risk-to-reward.
"In order to use these strategies effectively, you must go back through the markets and stare at char..."
Jan 12, 2016
Pending
The speaker personally tests at least 200 trades for each strategy to gain sufficient confidence, finding that 100 trades is insufficient.
"For me, that's not enough just because I'm don't feel very confident only having a 100 trades to go ..."
Jan 12, 2016
Pending
Extensive testing is crucial for developing an effective risk management plan in Forex trading.
"And the reason we have to do all this testing is because without it, you have no clue what your risk..."
Jan 12, 2016
Pending
Comprehensive backtesting of trading strategies can involve hundreds of hours.
"So by the end of it, you will probably have hundreds of hours in back testing."
Jan 12, 2016
Pending
The journey of a successful Forex trader involves daily testing of strategies, with no guarantee of profitability for each strategy tested.
"Well, I'm going to tell you guys that's the life of a successful trader. That's the kind of thing yo..."
Jan 12, 2016
Pending
Even after 200-300 hours of backtesting a single currency pair and strategy (e.g., looking for butterfly patterns over 10 years), there's no guarantee of profitability.
"And the reason is because all those hours that you put in back testing, there's no promise that they..."
Jan 12, 2016
Pending
Backtesting should include testing for multiple targets and different stop-loss placements to understand average risk-to-reward.
"So you can understand the risk-to-reward on every trade on average what you'll have. You may want to..."
Jan 12, 2016
Pending
While 100 trades is often cited as a benchmark for strategy assessment, the 'correct amount' of trades to test is subjective and varies.
"As long as you've tested the right the correct amount of trades, and no one can tell you what that i..."
Jan 12, 2016
Pending
After backtesting, organizing trade data (stops, targets, wins/losses) in a spreadsheet enables the creation of a risk management plan.
"Once you have those trades set in a spreadsheet with your stop- losses, your profit targets, the amo..."
Jan 12, 2016
Pending