Backtesting Secrets Revealed

Posted in: Trading Article, trading webinar

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backtesting trading secretsBy now, you’ve probably heard about the importance of backtesting… but what *is* backtesting exactly?

And most importantly, what’s the process to get started?

To be honest, this is a step that most new traders leave out as they begin the process of learning to trade.

Without it though, it is virtually impossible to truly know if your trading method has an expectancy that will help you make money.

 

Backtesting Is About Crunching Numbers

Perhaps one of the biggest reasons that people don’t test their trading method is they think it involves complex calculations.

Terms like these are enough to strike fear into those approaching the markets for the first (or second, third…)time:

  • Expectancy
  • Profit factor
  • MAE (maximum adverse excursion)

The issue is that regardless of how you feel about these terms, they are a must know if you are looking to have faith in your trading system.

Do you know what times of the day or even days of the week are your most profitable?

What about the results for each type of setup you are using in your method?

The hard truth is: You must know these numbers!

What about going forward?

 

Forward Testing Your System

Once your backtest is done using historical data, you are going to want to see how your system performs in real time.

This is when you find out how well you know your trading system including trading setups, stops, and managing your risk.

You will find out how slippage impacts the overall results of your method

Combining all the information from backtesting and forward testing will allow you to objectively tweak your system

Without having this important data, any changes you make to your trading method will simply be a guess.

In trading, guessing is not something you ever want to do.

 

Use Backtesting Software

While Netpicks is known as a standout in the trading system and education business, what you may not know is that virtually everyone with the company actually trades.

We have all faced the same problems you have faced and we absolutely understand what a challenging business trading can be.

You know that we can relate to your frustrations and the joys that come with trading and we applaude everyone that attempts a run at trading.

Whether you are a customer through one of your trading systems or you simply watch our videos or read the trading tips blog, we want to support you.

  1. You know backtesting is important.
  2. You know it can be daunting.
  3. You know it can be time consuming.

So do we.

And we want to help you.

 

Free Backtesting Software

Let us help you get a handle on the important information you need to make an educated decision on the viability of your trading method.

Let us help you know if you are actually moving forward (or backwards) on your road to trading success.

The good news is that backtesting isn’t nearly as confusing or time-consuming as it once was!

Watch the backtesting tutorial below where we’ll educate you on not only *why* it’s so important to backtest but we’ll take you from start-to-finish on how to do it yourself.

The result will be increased confidence in your trade plan (whether you’re trading our systems, someone else’s or your own) and a clear path to your trading goals.

Doesn’t matter if you day trade, swing trade, trade for a living or a hobby – regardless of what market or broker you’re with, backtesting matters.

Best of all, we’re actually GIFTING you a copy of the Ultimate Trade Analyzer Simple

Just sign up right now for your copy of the UTA Simple and settle in to watch the following backtesting video.

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