#forex backtesting

This article dives deep into the world of Forex trading, exploring the concept of backtesting RSI settings.

hey everyone Lorraine Pierce here with five star forex systems com and this is a ZX + system and this is just a quick video to tell you about that testing um if you have a backtest of your strategy then you're just guessing that its profitable and in my group i posted i made a post talking about back testing exactly how you do it um and so let me show you real quick what you would do properties i right clicked this is normally checked unchecked chart auto scroll all right clear your chart and then scroll back okay so that you can't see all your under hitters and stuff i'm doing a three-month back test from August September in October for several pairs with the easy access strategy so once you get back to say the beginning august then you want to load your your template for your system right and then you can start you know back testing unfortunately there's no automated program that i know of that will do this you know because it's based on your entry and your exit strategy also so everybody's going to be different but for this is X plus system what I'm doing is entering after a semaphore Sun a major some for Sam these are called failed sons I don't trade off those I just trade off the major level three sons so what I've done is is just track you know the one trade i would take after the summer form which would be right here I'd enter on this green arrow and then exit up here right now I have also activated trailing gate or EA and it's an automatic trailing stop oh so you don't have to set it every time and it'll really increase your profits because it's going to follow your profits and then do a trailing of whatever you have said it I have it set for 15 pips but and this is what I'm doing I'm tracking it on a Google sheets and you know my entries are enter after the semaphore and on the candle with the arrow in the correct direction exit by the trailing Gator which is 15 phipps from the highest profit or a 20 pip stop loss max so if the trade just starts going against me the minute I enter it's gonna you know I have a 25 stop loss set alright so as you can see with the euro cad you know i've gone from august through october and track the results three losses the rest of wins I didn't total the pips but as you can see it's a lot of tips and that's just one currency pair now I'm working on the great british pound USD same thing and if you have a back tested your strategy then you're just guessing you don't know if it's going to work or not so this is something i've read about recently i'm determined to be a pro trader I don't call myself a pro yet because I'm not making a living doing this but I'm determined to be one I'm patient I've studied I've practiced for over a year and you're not going to be professional anything unless you practice and study all right you don't become a heart surgeon overnight and you're not gonna become a pro forex trader overnight either but another thing i want to show you is if you have a sim for sun like this and then entering and they go sideways and say trailing Gator take your profits you close the trade you could always enter again when you have another arrow you know in the right direction obviously I'm not going to do it by here and a downtrend that'd be stupid all right I gotta use your brain the last signal was a cell son so I'm in a bit this is a bearish market until I see a semaphore bye son okay so these are all bearish trades you can sell here you can so here you can self here and if you took these cells uh if you didn't use the trail and Gator to say you just trade some afford to simmer for you trade it 74 274 you woulda made 200 208 pics okay and so as you can see the trend change we get a nice green semaphore and then this is where i would take my next trade right here and it went flat it probably wouldn't close me out here the trailer gator it would have kept going and all the way up to here and then probably what a close it out right here that's another 189 pips and all I had to do was place this order right here that's it these arrows show up when all these trends po line blue candle blue slow moving average blue fast moving average blue trend all right i had this program especially to do that that I would get good entries and so that you would get good on trace all right because that's high ninety percent of forex is picking the right time to enter the market and the right time the exit of course is important too in the trailing stop really helps because you know prior to adding a trailing stop I would have probably got out when it started going flat here you know but with the trailing stop automatically on there I don't have to do that I can just let it ride and catch a whole lot more tips so anyway i hope this helps you guys some you know as you can see like on this one you could get back in here if you did get out if you get back in here skip that skip that skip that get back in here on why would you skip this because the last semaphore was a by ok this is super simple guys so try not to complicate it the system is only 50 bucks one-time integers you get email alerts when these arrows show up you can email alerts when his son show up how simple can it be alright and i have a group 20 pips a day on facebook it's 20 pips a day the links in the description down here join our group there's other people using the system and let's all make some pips in 2016 talk to you later bye

welcome to the survey which is about Forex back testing I basically getting a strategy together or system working out rules by doing hypothetical testing on historical data game backwards and getting a strategy that makes money now how much use is it my own view is it's not much use at all because back testing is really fatally flawed now in terms of why is it fatally flawed well the reason is obvious you've got the historical data you knew what happened and you ferment carafe it and bend the strategy to fit the data though that is a bit similar do just going shooting blindfolded at a wool then basically going over after the event drawing a circle around each shot saying it's a bull's-eye you're doing it in hindsight I think what you find with some traders is they were obvious they really want to have a profitable trading strategy so they're putting just too many variables so for example if the first set of rules doesn't work they'll tweak the rules were adding even more rules they'll just bend the system to fit the data the more rules in a trading system is a general rule but more likely the system is not going to work in real time they're in bad testing I have seen people come up with profitable trading systems okay I can give you a single rule trading system that works that by a four week I hold the position then reverse a four week low hold the position until new four week highs hit that is called Richard dungeons for weak rule now that will actually make profits over the longer term but you have a lot of drawdown okay and basically long periods of flat trading it'll make money but not a huge amount of money but it will work because it's only one rule you cannot kerf it a one rule sister I think system rules yeah to work once to get about three it's not going to work okay and the problem is with the very simple systems that are back tested they have too much drawdown too long in terms of flat periods in my view and not enough profit no I think we live in an age where people yeah want to use computers they make people feel comfortable and you know make them feel safe and yeah back testing is a way of making a trader overconfident in the strategy most traders do not want to have responsibility for their trading rules they want to make seem automated as much as possible and it just simply will not work if you look at the best traders in the world they'll have a rule set okay they have to have rules that they know that basically they hang out the filter the trading signals they need the basic decide how much money should go on a trading signal etc etc so they do have rules but they're very flexible in their approach to the rules now filter out you know the trades that they think are the best and the idea that Forex is computerized or you can computerize it and make it game of science it's taking wrong it cannot be against science and humans are involved and humans are unpredictable and basically what you get effectively in the markets they look yeah very sort of orderly going backwards they're always subtly changes always subtle changes in the markets that will break any trading strategy has been over optimized cur fitted in a bank test that's just a reality of trading there are no other business actually that I know of where traders actually think they can come in and delegate the money-making process to a computerised set of rules and not have to do anything if it were that easy a lot more people would be making money so I think you have a bank testing yeah you can get very simple strategies that work but normally just under three rules okay they're not going to make enough money that not too much drawdown to longer flat periods okay the most more rules the more likely you are to have curve fitted it sorts the best way to make money and how do you really get a profitable trading strategy and be confident in the answer is forward testing what I mean by that is you basically find some high probability yet chart patterns or trade setups okay then work out a basic rule set to trade them and then basically filter each setup yourself okay the only way of doing it for X rating yeah it can be very simple but you cannot put yourself outside the equation it's you and your strategy and you are responsible for it and implementing sorry implementing it and you must actually be involved you must think about the trade setups you must take responsibility if you do that you can win do you think you can just back tests come up with a strategy that's going to just make money I would actually say yes forex trading would probably not be fee in forex trading suits someone who wants to be involved in decision making process takes full responsibility for their signals and their stretching that's the video for today thank you very much watching me as future you