Simple question for backtesters.

[bmwhendrix]

I do not have the ability to backtest, so I am taking the easy way to hopefully get an answer to this simple question.

If you enter a trade at random with a fixed stop and an equal fixed target, in the long run do you break even?

Say a 10 point stop and target on a 2 minute NQ chart.

I think yes, but would like feedback from those smarter than me.

Don

 

[ericlala]

commissions?

 

[Unhommefou]

Quote from bmwhendrix:

I do not have the ability to backtest...

Don

Yes you do!

Just download Ninjatrader.

It free to use everything except the Autotrader and Live trading with the program.

You can get free End of Day stock data by using the Yahoo feed (it will show you how to set it up), and if you want futures testing data...well...you are going to have to pay for it by find a data provider.

But, better to pay $200-400 Dollars now (depending on where you purchase it from), than pay thousands later from losses...:eek:

 

[BT247]

I know of a platform you can try for 30 days free for backtesting. Generally the rule of thumb is you want a 3:1 reward to risk ratio or better. Stops shouldn't be arbitrary either, they should account for the stocks recent volatility. Here's a channel I constructed. A close above the top line is a cover signal for a short, a close below the bottom line is a sell in a long.

<a href="http://www.flickr.com/photos/23623637@N05/3475218070/" title="Picture 9 by BT24_7, on Flickr"><img src="http://farm4.static.flickr.com/3586/3475218070_ec33eb7e79.jpg" width="500" height="313" alt="Picture 9" /></a>