Backtesting is useless

[Tradex]

You really don't know if @qaz is a real trader.

Yes of course.

In any case, "traders" who think that backtests are useless should have their head examined.

 

[d08]

https://www.thoughtco.com/appeal-to-age-fallacy-250345#:~:text=Explanation of the Appeal to Age Fallacy&text=The Latin for Appeal to,the most common form is:&text=Sticking with something that works,argument, it is a fallacy.

You seem confused. Lindq has been trading for 20 years or longer and he was backtesting back in early 2000s or earlier. That's not the "appeal to age" fallacy, that's experience.

 

[qaz]

Hmmm...so you might "consider" trading a LOSING system.

There is nothing more to add.

An edge is when you have positive expectancy. You posted a consistently losing system and asked if anyone would trade the opposite of it.

My reply is: if the data of the backtested system has " 1 trade a week for the past 30 years, then yes I will consider it if there is still an edge after slippage."

Does a losing system have an Edge?

 

[Tradex]

You posted a consistently losing system and asked if anyone would trade the opposite of it.

Please copy and paste this alleged post.

As a reminder here is my original post:

"Again, the question is very simple: a backtest shows that trading system X has been losing 10% a year on average, for the last 30 years.

Would you trade such a system, now?

Would you buy this system, if it was for sale?

A simple YES or NO will do."

 

[murray t turtle]

I think you may be taking an overly simplistic view! While the past does not infer the future, parts do rhyme. One can learn from history. IMHO, an important role in backtesting is to observe how your detailed trading strategy would have performed if applied to periods of history. This is valuable. The notion of backtesting to develop a trading strategy is one that should instill doubt and fear. (Attributes of curve fitting apply and relate to your "useless" comment)

%%
That;
+ some markets are known for bad data which can be another big problem.
Other markets ,with different data, can be helpful...………………………………………..Trend study may be helpful; for those interested in random patterns/study that.

 

[Tradex]

Trend study may be helpful; for those interested in random patterns/study that.

There are no real trends in random data, meaning it is impossible to exploit them financially.
With random data the price is normally distributed, clearly not the case with market data.

 

[murray t turtle]

There are no real trends in random data, meaning it is impossible to exploit them financially.
With random data the price is normally distributed, clearly not the case with market data.

%%
I agree+ prefer trends.
I did not mean to imply I was interested in random patterns; but op noted that book, so I don't mind if spends his time with random. Sideways slop/chop are tricky trends ; I would not call them random...…………………………………………………………………………………………..

 

[ironchef]

You seem confused. Lindq has been trading for 20 years or longer and he was backtesting back in early 2000s or earlier. That's not the "appeal to age" fallacy, that's experience.

@lindq's posts were always thoughtful and helpful. Often direct and to the point. This newbie learned a lot from him.

 

[qaz]

Please copy and paste this alleged post.

As a reminder here is my original post:

"Again, the question is very simple: a backtest shows that trading system X has been losing 10% a year on average, for the last 30 years.

Would you trade such a system, now?

Would you buy this system, if it was for sale?

A simple YES or NO will do."

I quoted you in post #108. Even bolded it for you in case you misread it again. Look at your original post #98

 

[Tradex]

I quoted you in post #108. Even bolded it for you in case you misread it again. Look at your original post #98

Alright, I am done here, "traders" who want to trade unproven, non-backtested trading systems are free to do so, it's their money after all.