Back test your decision to use back testing

SimpleMeLike said:
Good Morning danielc1,

I am confused by your statement.

Can you please explain in more detail?

Thank you
More...

Most data that people use for backtesting is a representation of what has happened in the past. That representation is simplified to give a comprehension model that most people would understand. For example: Open, High, Low, Close on a chart. Maybe with volume, bid-ask, delta, and even fundamentals. Now all those data points are in no way all that happens during a trading session. Every tick recorded is just that, a recorded tick. It doesn't tell you 'why' it moved, 'how' it moved, and by 'who' it moved...

It is like learning to drive a car by looking at a recorded GPS tracking device. Now, if you know how to drive a car, a GPS is great. But no person will learn how to drive a car by just looking at all the different scenarios a GPS will get you to your destination. That is what backtesting is.
 
danielc1 said:
You do not become a profitable trader by finding a system that makes you money according to a backtest. Read that sentence twice. It will save you a lot of time.
More...
Good Morning danielc1.

If back testing a system or trading idea or trading method for edge or profitability does not make a trader a profitable trader, please explain what makes a trader a profitable trader?

Thank you.
 
oraclewizard77 said:
Back testing for the most part is only useful in automated systems. Using PA, you can trade in real time at the hard right edge of the screen.

I know I will take shit for the following statement, but many advanced traders can actually do what is called "always in" described in 100 pages deep in ET.

What this means is you know the market is going down, so you trade down, then market goes sides ways or up, and you either get out or reverse your position.

This creates turns, the turns are how you achieve profit not with a profit target but when for example the market reverses, you are now long instead of short and you build your profit throughout the day.
More...
Good Morning oraclewizard77,

This is a very good statement. I like Always in. I am Always in trader. I have no special setup or no edge or anything. I just do what makes sense in real time.

I actually agree with you this on statement. @MarkBrown suggest this to me as well.

I think searching for a setup(s) is overrated. I learn nothing doing this.

I learn and make the most money from Over Trading and Revenge Trading and doing it all day too.
 
SimpleMeLike said:
Good Morning danielc1.

If back testing a system or trading idea or trading method for edge or profitability does not make a trader a profitable trader, please explain what makes a trader a profitable trader?

Thank you.
More...

Besides the mindset and knowing who you are and how you react in every circumstance?

A true belief in cutting losers and running winners and a real understanding of probabilities.
 
Are you saying you can find a random destination better without GPS than with?


danielc1 said:
Most data that people use for backtesting is a representation of what has happened in the past. That representation is simplified to give a comprehension model that most people would understand. For example: Open, High, Low, Close on a chart. Maybe with volume, bid-ask, delta, and even fundamentals. Now all those data points are in no way all that happens during a trading session. Every tick recorded is just that, a recorded tick. It doesn't tell you 'why' it moved, 'how' it moved, and by 'who' it moved...

It is like learning to drive a car by looking at a recorded GPS tracking device. Now, if you know how to drive a car, a GPS is great. But no person will learn how to drive a car by just looking at all the different scenarios a GPS will get you to your destination. That is what backtesting is.
More...
 
danielc1 said:
Yeah, know that feeling... my GPS also tries to steer me onto roads that need to be built in the future.
More...
%%
LOL;
old school paper maps can help, even though they time stamp those, good.
I look for patterns anywhere.
Average tractor trailer is 72'= + most drive much better than the pleasure drivers.
Except the union made mess =Yellow Freight trainwreck:caution::caution:
 
You must log in or register to reply here.
Back
Top