The power of backtesting

So today we will speak about back testing your strategy, I speak a little bit about it yesterday in my article on the stop loss setting.

Why back testing your strategy?

For my part I use back testing has it help me gain confidence in my stuff has i can confirm my idea on the market by using past market behavior. It can also save you a lot of time versus a normal live testing.  But always keep in mind that the past behavior of the market is not a guaranty of the future. This is why I recommend to do back testing on a regular basis and by doing it regularly you will become better at it too and the best part is that it is totally free to do it!

What to do when back testing?

The most important thing to do when back testing is to take note of everything you see. For myself I always had paper note book to write my stuff when I back test. You can leave note on the computer or anything as long as you take note its fine. Don’t do the mistake to leave it in your head as you will lose your idea or leave place to interpretation or distortion from your first idea!

Now let’s talk about how the week begins!

Last night I got a really bad sleeping night, has I enter the market with my improved strategy last Thursday, even if I got a lot of confidence in the practice mode with my strategy it put a lot of stress on me when I put new stuff on the real market! Even if it all working fine! I never find any way to deal with this stress in this 2-3 days period!

So for now my multiple time frame system that I explain a little here, is working fine and can wait to see where the market bring us!

You can see my etoro profile for market update