How to Backtest PROPERLY

Summary

In this video, trader Artie reveals the critical importance of proper back testing for forex and day trading strategies. He highlights common mistakes, such as back testing without considering the specific trading times and market conditions. Artie recommends setting vertical lines to define your trading window and using TradingView's replay feature for realistic analysis. By systematically testing strategies over 100 instances, traders can determine a reliable win-loss ratio. He emphasizes disciplined trading based on well-defined rules, patience, and not forcing trades, ultimately guiding viewers toward more effective trading practices.

Takeaways

• 😀 The power of the mind can influence the body, highlighting the connection between thoughts and physical health.
• 🧠 Our beliefs and perceptions shape our reality, suggesting that changing our mindset can lead to transformative experiences.
• 🔬 Quantum physics principles indicate that reality is not fixed but can be altered through conscious intention.
• 🌌 The universe operates on a frequency, and aligning our thoughts with positive frequencies can attract desired outcomes.
• 💭 Visualization techniques can effectively rewire the brain, allowing individuals to create their desired future.
• 🌱 Emotions play a crucial role in manifesting change; positive emotions can enhance well-being and accelerate personal growth.
• 🌀 Meditation practices can help individuals tap into deeper states of consciousness, facilitating healing and self-discovery.
• ✨ The mind-body connection is essential for overall health; stress and negative emotions can lead to physical ailments.
• 📈 Personal development involves stepping out of comfort zones and embracing uncertainty to unlock new possibilities.
• 🌈 Community and support systems are vital for fostering growth, as shared experiences can amplify individual transformations.

Q & A

What is the main focus of the video script?

The main focus of the video script is to provide insights on backtesting strategies for forex and day trading, emphasizing the importance of conducting backtests correctly to enhance trading performance.

Why is backtesting considered crucial for traders?

Backtesting is crucial because it allows traders to evaluate their strategies against historical data, helping them understand potential profitability and market behavior.

What common mistakes do traders make when backtesting?

Common mistakes include starting backtesting from the current date without considering trading conditions, failing to account for different market sessions, and not setting clear timeframes for analysis.

How should traders set their trading hours for backtesting?

Traders should establish specific trading hours based on their routine, marking these periods on charts with vertical lines to focus their backtesting efforts.

What sample size is recommended for effective backtesting?

It is recommended to backtest at least 100 instances to gather a meaningful sample size that can provide reliable win/loss statistics.

What tools can be used to simulate real-time trading during backtesting?

Tools like TradingView’s replay functionality can be used to remove existing candles and simulate real-time trading, allowing for unbiased analysis of price action.

What factors should traders consider when analyzing price movements?

Traders should pay attention to market structure, signs of trend reversals, and consolidations, planning trades based on these observations.

What is the significance of adjusting stop-loss orders during trades?

Adjusting stop-loss orders is significant because it helps secure gains and minimize risks as the trading session progresses, protecting profits from unexpected market movements.

Why is it advised to close trades by the end of the trading session?

Closing trades by the end of the trading session is advised to avoid unexpected overnight volatility, which can significantly impact open positions.

What is the final call to action for viewers in the video?

The final call to action encourages viewers to subscribe for more tips and strategies on effective trading techniques to help them unlock their potential.