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Originally Posted by 4xfool
Why doesnt backtesting work?? It's not a complicated process. Please explain why it doesnt work.
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For a host of reasons.
One is, trading live, minute by minute, hour by hour, day by day.... lots of different stuff comes down in the
fx market. Extreme stuff. Extreme price moves and swings. Things that would
destroy a backtested system when traded in a live setting with real money. Take it from me, I've had lots of very good systems totally demolished in live trading conditions.
Backtesting does not account for your emotions, your mental and psychological state of mind over a 8760-hour trading period (total hours for 1-year).
People....
do things differently in a live state of trading than simple backtesting takes in account for.
That's why backtesting doesn't work.
I appreciate your hard work, man, I really do. You keep up your hard work approach to trading and I am certain you will advance.
The only way to get anywhere trading forex when you first begin is by trading a demo(s). Once you get SEVERAL good trade set-ups, go on to open a live account and MAKE SMALL TRADES!
Build your trade unit size up gradually, using the profits you made to increase your account size.
Many times I thought I had finally developed the rad system(s) just to have the market teach me otherwise.
Remain a 'student of the market' - it is your best way to excel and advance. One day you may even make it to 'trader' status.
Don't be afraid to trade your arse off on a demo(s) for a
year. It doesn't make you a wimp. Each person will advance at a different rate than another. Even after close to a year and a half, yes I trade a live acct but still have demo-testing(s) running on the side, of systems I hope to eventually implement in live trading. I won't bring them to the market in live trading until I am certain they won't get obliterated.
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