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And if you cannot through careful reflection and analysis codify that 90%, then it is bullshit. Rules rule.

Out of respect I won't provide a link, but this poster is home-brewing an auto-trading environment before he even has a profitable strategy: "So my goal is to build a framework that provides good strategies a high probability of success. Once the framework is operational I can spend months...

Nkhoi, I am waiting for a punch line myself. Provisionally, it might be: "Traders prefer the comfort of hopeful self-delusion to the heart-breaking discipline of backtesting." But I am not finished reading yet. The picks are random because I am only reading new or very recent posts and...

Indeed, M. Taon, the humiliation of months or years of failure in testing of scores, if not hundreds, of seemingly good ideas makes for poor drama. It is in fact quite pathetic and disheartening. The only good drama is in finding that one idea which works, and of course no trader ever reveals...

For a long-running delusion, take a peek here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=135376&perpage=6&pagenumber=1 where the thread owner advocates pivots as S/R. What could be simpler than to backtest this assertion? You guessed it. No testing.

A sincere noob here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=188096&perpage=6&pagenumber=1 is taking a four week class on trading. So far in his posts I have not seen the word "system." Why not? Could it be that his teachers don't ever want to be pinned down by backtesting?

The thread owner here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=188371&perpage=6&pagenumber=1 says he has a system, but complains of taking profits too early, leaving much money on the table. Why doesn't he codify and backtest? One answer might be that he doesn't want to...

The poster here: http://www.elitetrader.com/vb/showthread.php?threadid=189077 wants to know if he should never let a profit turn into a loss. He describes his typical trading scenario. If indeed he has a system, he could find the answer by backtesting. Why, instead, does he ask ET? Does he...

Inference schminference, Jack. Success in trading is all about accidence schmackcidence. Suppose that in my drunken schtupor I have a random brain phart that Friday mornings suck. But, schmashed as I am, I code up that Thursday afternoons blow. And my error tests with positive expectation. And I...

Here is another good one: http://www.elitetrader.com/vb/showthread.php?threadid=188955 Poster wants to know what a reasonable percent loss per trade is. And he gets advice based on arbitrary statistical considerations. Doesn't anybody backtest here? Oh, yes, I forgot. First you have to...

Today's lesson on self-delusion was inspired by this thread: http://www.elitetrader.com/vb/showthread.php?s=&threadid=186388&perpage=6&pagenumber=1 wherein we see a brilliant mind which can see in hindsight that a test of the previous high was "fakey." My advice is to learn how to backtest...

Does experience with a thousand failed systems count? Or only experience with one working one? From watching volume behavior on a one-second chart day-in-and-day-out for years, I conclude that there are in fact TWO Holy Grails, and every profitable trader knows them, but each trader knows them...

...and the Madness of Cliques (with apologies to the memory of the great Charles Mackay for the bad pun). Ordinarily I can let trading foolishness wash over me, as it is as common here as rain on a summer day in Florida. But this...

Thanks to the respondents. Periodically I like to whack ET with a heavy ball peen hammer to see how it resonates. I got what I wanted.

An astute observation, 6. Thanks. We have both been there, haha! The Fifth Law is: If you see it in a book, in a magazine or on the web, don't waste your time testing it. It doesn't work. Contrariwise, if you say to yourself, "Did I just see what I think I saw, and it's so absurd it...

The Fourth Law is: Never include more than one "strong" parameter in your test system. In plain language, never attempt to optimize more than one parameter. The classic case is the crossover of two MAs. That has two "strong" parameters in the form of the two MA periods. You can spend a...

Thanks, Organ. But there are multiple levels of jokes here. "Mikasa" is the uncountable reincarnation of a (im)poster who has been hanging here as long as I have. He is a confirmed old Random Walker (and bachelor), which world view he came to by stumbling from one lampost to the next after last...

Well, this AM was almost fun. Since this thread is generating more heat than light, I'll wrap it up quickly. Here is the Third Law: If your idea doesn't work with no optimization, it's a bad idea. Run your first test with WAGged parameters based on the conditions at the time you first had...

Soooory. I don't buy into the random walk theory. That trends are Brownian. Too much evidence at the tick level to the contrary. And I seriously doubt that anyone at Goldman is peculating using market orders. More likely they are too busy maintaining Jack's Pool Extraction Paradigm with limit...

So we now unnaturally progress to the Second Law: It follows from the First Law that if you cannot write an algorithm for your trading idea, and therefore test it, you do not have a valid idea. In simple language, "You cannot backtest an illusion."