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Long term profitable back-testing: No guarantee of future profitability
I'm not trying to advertise anything, I just wander what do you think about this problem of what to expect from strategies. I still don't know how very well how to minimize the risk of developing a terrible strategy that looks fine on backtesting...
Cheers
Nuno
Knowledge re risk will come from experience, forward testing....
The author of that article is very experienced...... you can not transfer his experience to yourself, you have to gain it for yourself and that means a lot of testing.
I read it. I believe it is true.
I take backtesting as first filter to sort/create strategies with good results in past.
I take forwardtesting as 2nd filter to see which strategies are profitable in demo environment.
If strategy survives 1st and 2nd level above I start trading on real, microacounts.
And finally couple of them is ready to start on real, normal size account.
It took lot of time and effort but it is the only way I see as profitable.
I read it. I believe it is true.
I take backtesting as first filter to sort/create strategies with good results in past.
I take forwardtesting as 2nd filter to see which strategies are profitable in demo environment.
If strategy survives 1st and 2nd level above I start trading on real, microacounts.
And finally couple of them is ready to start on real, normal size account.
It took lot of time and effort but it is the only way I see as profitable.
I agree with everything you mention....
I am developing strategies and testing many daily...... some work and some are not quite good enough.
I split the data into two sets, the strategy building data and the test data. After I have developed what looks like a good strategy I then look at it on the test data to see if it still works.. If it does I then run it on a demo account.
If that is possible then we wouldn't be having any problems, but like you have it must come from us. We should work hard to develop the experience we needed, which doesn't come easily! Much of this can be gotten from learning and applying what we have learned in terms of trading, thereafter we seek the balance needed, even though things go bad sometimes we must learn to control our nerves just like a piece from an educational tool by my broker!
"My broker this, my broker that..." Are you a broker promoter? Your posts are more of a babble, unless there's a strong hint to brokers. In my book intentional babble to mask broker promotion is spamming, we do not tolerate this here.
I suggest Rolle stick to posts about learning to use FSB, he/she seems to be blasting posts across the forum and saying little to do with FSB.
Out of 23 posts.... nothing to do with FSB, !!
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