Is it really that simple? Is the strategy profitable? Before we start, let me explain how I evaluate a trading strategy. I back test strategies for as far back as 10 years of data, starting from year However, only successful strategies that are consistently profitable for all 10 years can make it into my books. If you are interested in discovering how I became a profitable trader, I highly recommend you to read my review on Forex Tester 2.
The test started on Jan with an account balance of USD 10, Then on 27 July , 2 good trades happened and sent the account balance up to USD 10, This happened because market was trending heavily and the strategy was able to capture the profit. This was a good result although the account balance continued to range between USD 10, and USD 10, for the next 3 months. On 25 Oct , after the 62nd trade, the account balance began to slide back down quickly to below USD 10, The total draw down from this move was -USD There are a few reasons why I decided to terminate this project after just 1 year of testing, even though there were still money in the account.
No real edge in this strategy. There was no equity growth, and just waste of time. Huge draw down greater than gains. The draw down of -USD You would have started with a big hole in your account before making any money.
Although account balance once went up by USD How can my account balance just depend on these 2 trades? And now comes the golden question: What if you missed those 2 good trades?
Dear traders, the purpose of this Forex strategy review is not to put down anybody or any website. Although the exact trading rules of this strategy failed our test, it does not mean that it cannot be fine-tuned.
I am using Forex Tester 2 for my back testing, and only the best strategies that survived my abuse can make it into my books. I have also written a review on Forex Tester 2 and I highly recommend you to read it at your free time.
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I surprised with the research you made to create this particular submit extraordinary. Even though knowledge in manual trading is essential on making gains in Forex but if you do all your trading without use of Robot, then you will be in a state of crisis. Giving you help to make decision to sell or buy. The Entry and Exit Rules Time frame: We will use 4 hour time frame. This is an example of a good entry 1. Back Test Results Number of years tested: Exactly 1 year Data period back-tested: USD 10, Number of trades done: Final Words Dear traders, the purpose of this Forex strategy review is not to put down anybody or any website.
Why is back testing so important? Bollinger Bands reversal with high accuracy.More...