have losing trades and periods as well. Okay. Congratulations.
take part in that do come over to the site. The link is in the
subscribe to the channel. If you don't already do so and
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It really is so important. if you're going to succeed in this
found the video useful. hope you found the lesson important.
You made it to the end you are in the top 1%. Look. I hope you
with in the real market. Backtesting has a number of
panels look at the statistics and it works it all out for you
trades. It works out the gross profit and profit factor and so
to do in periods of draw down when you're losing. And we will
if you are serious that maybe you give this a look at as well
example, if I want to pay. Aa trade there I can hit a sell
the more hours you spend doing this. the better traders you
and place the trade, and of course that trade then would be
it manually on your own journal. but if you are of the
hour. You've got the 1 hour. You've got the 15 minutes you
advance by 1 hour every 4 hours. Of course, the four-hour
a daily. The hourly will advance by 24 hours. Clearly
quick look at the Forex Tester for software. Now. This is a
against the US dollar. You've got the daily. You've got the 4
and probability of winning and so forth so. So lots of bells
of all your. Your data as well, should you not wish to do it
of Forex Tester Forex is that it actually does keep a track
strategy to see how it performs and I said on the board that
video has been released, you can. And follow us on all the
business, don't forget to leave me a comment. Let me know what
you think since you made it to the end. Don't forget to
that bell notification will notify you the moment. The next
crucial that you engage in extensive Backtesting with your
comments about it as well so building up the data of your
this is the most important thing you'll ever do in trading
strategies that you intend to risk your hard-earned money
and whistles here on Forex Tester Forex so I encourage you
advantages not only to make sure you got the edge but also
but either way mt 4 four or Forex Tester Forex. it is
here. We've had a total of 2131 probable trades. fifteen losing
forth the average profits and so forth probability of a loss
making sure that you understand the strategy. so you know what
manually. I do think there's something to be said for doing
inclination not to do it that way you can go to view show
entry levels. your stock levels your take profit levels any
rules. Of entry are there, but of course you put out your
you can scroll on through to see if the profit or loss was
taken on this particular trade. In fact, we hit profit target
will end up without a doubt now. another really cool part
candle would advance, but if I clicked on the 4 hour. Chart
on that so that again go down in your trade journal all the
stop. I can put my stop loss in as well. Maybe have my stop
much less cumbersome than using the mt 4 Forex. so, for
loss up there maybe have my take profit target down here
time, which of course will be four of these bars. and of
executed once the criteria has been met. and then, of course
place trades as well. So although it is manual, it's
course you got the daily there as well. So every time you hit
and hit the Space Bar. It's going to advance 4 hours at a
on the 1 hour every time I hit the space bar. It's going to
good thing about this over the mt 4 Forex is that you can
particular time periods that you're on. So, for example, I'm
you download the data, you can put up the charts in the
out a subscription? But basically what you need to do
third party. There's nothing to do with us here. although we
have negotiated a better deal for you should you wish to take
here, for example, I've got the what is this. This is the euro
start your test by clicking start. and then every time I
hit the space bar. It's going to advance by one of those
software and we'll talk about that now. Okay. So here's a
regular way that you would do in your in the real world. So
of course is download the data. Whatever data you want. Once
to. Maybe distorts your Backtesting. I don't know some
away you go. So this is the mt 4 four version. as I say it's
a 4 hour chart and if you were to want to have higher time
on the short lesson, but these are the type of metrics that
write down your profit targets and you calculate the risk
downs of this is that you can only have one particular time
that you can monitor the results now, here's an example
laminated if possible, and you're going to abide by those
This is just roughly drawn of course for the sake of this
it manually Backtesting of Mt 4 Forex, But it's certainly a
start to work out these metrics. Now, I do have a
pen and paper or indeed on an XL files. So basically the
a pinball. There's a pinball you might want to take that
of a quick trade journal that I wrestled up there on excel. You
4 hour candles once you've scrolled back to the desired
scroll through the charts looking for your setup so
always tweaking changing because they're always unhappy
candle at a time and you can see here. so we're looking for
confirm your strategy has an edge. so it doesn't give you
eight in the morning, New York time or wherever you are of
the time period in which you are wanting to trade or
cycle, tweaking changing ditching strategies finding a
course on the globe. Once you've decided that you have
regular chart. If you right, click on the chart, go to
with what the strategy does in and Pierce. If you've done your
have seen my I think. Most popular video and my most
reasons? why we backtest? So I think there's two main reasons
relevant video that I've ever put out there here in the
strategy name the pair buy sell entry price. just a regular
from somewhere you can do it manually. You can do it on a
confidence to avoid the cycle of doom. I'm sure many of you
the mt. 4. Forex you'd have to toggle back between the H four
some moving averages as well. and when you're ready, you will
Backtesting. So here we've got the 4 hour chart. so these are
frame confirmation, you wouldn't be able to do it using
indeed it is. But once you go back to day one that is going
targets and so forth. and after that, once you've done that
people like to use Mt 4 Forex. I prefer to use Backtesting
and this is going to help you spot these criteria that you've
Backtesting results in the journal trying to keep it as
you need to get once you've done your Backtesting to
you write down your entry. You write down your. Losses you
to start to say at the beginning of the year. Now it's
particular strategy. so I'm not going to go too much into that
new strategy. That's why traders fail because they're
Backtesting, you know exactly how that strategy performs, so
separate lesson on metrics. I don't want to go into them now
tweaking it losing money and just going around in that
rules on each and every trade you're looking for your
details that you need included in the strategy and of course,
then you record the results as well. stop out hit profit
time, remember again, as I said they're on the board, make sure
you won't be falling into that cycle of doom right now, let's
this will basically allow you to start working out the
hitting the ftw button. so ftw will advance the candle one
evaluate with your strategy is indeed a viable strategy you
and then using your mouse wheel. you can scroll back to a
accordingly. Now, there is a quite a cumbersome way of doing
your strategy has an edge and of course. The most important
your checklist so making sure that you are proficient in
good. a reason why we backtest as well and it gives us the
quick video. Maybe one out there you might want to put on
jump on to the screens and I'll show you two basic ways that we
forest space and that's the cycle of doom. That's why so
already laid out in your strategy and in your and in
your rules set out, you've got them there on a checklist
strategies you'll be looking for certain things to happen
the the profit targets. The stops was a profitable trade
was it AA losing trade and so forth so keeping your
actually executing the strategy. So that's a really
keep your Backtesting logs in the journal such as that and
using of course with real money. So you gotta make sure
that you are Backtesting at the time. When you will be able to
get to know the ins and outs of it. once you see it perform. so
to put on some support and resistance lines.
may want to make one of your own or you can purchase one
with an edge, but you know it has it's losing streaks as
not necessarily the best way to back test. One of the draw
Backtesting software, which we'll talk about in a moment
and you place these trades into a journal, a trade journal so
journal so you can get the metrics of your strategy.
frame on the back test at the same time. For example, this is
Backtesting over a number of months or years, then you can
any surprises of the forward like data, which you'll be
example, as you would do in the regular market, you might want
trade be at eight in the morning, London time or be at
trade for example, that one but it worked out quite nicely, but
at the moment, but it's important that you keep the
important to note. So when you're Backtesting that you use
well. You only know that if you back test so Backtesting to
data that will give you the confidence to trade it in for
perform. Okay. So why do we backtest well number of
why we backtest Firstly, it's to confirm whether our strategy
viable way of doing it. if you are unable to purchase any
predetermined rules of engagement to align. So, for
desired. Time you can see the dates there at the bottom.
metrics behind the strategy. Now we do have. A separate
true to life as you would do and when you keep your journal,
properties and click the chart. Also scroll and then click okay
your Backtesting trades just as you will be doing when you
We've got may May 2020 keep scrolling back. We might want
you're doing your Backtesting and taking it as seriously as
when we get on to the screens, but keeping a journal of all
in conjunction with your checklist, It's also worthwhile
keeping a journal that's basically logging all the buys
strategy will develop and then you take your trades. You need
you would as if there was real money on the line so using it
lesson on the metrics, it's basically how we evaluate a
trading. So, for example, there's no point Backtesting
think it's really important that you use your Backtesting
can back come on. so first off. we'll look at Backtesting using
US is open, you don't want to be Backtesting the US data. so
that you backtest in the time zones that you're going to be
making money And when you see your edge play out over past
when you start your trading journey. Maybe there is
start. Your regular trading with the real live account so
to make sure that you're following the checklist when
data in the Australian major Pacific time zone. If you're.
periods tweaking it tweaking it again, making some money
the regular mt 4 Forex platform. so you go to a
I would go as far as to say that 99% of you won't even be
data. So, for example, if you know that you've got a strategy
getting a strategy Trading a strategy having some losing
because it's about the same percentage 99% of you will fail
many traders failed, you very briefly cycle of doom is
journal. This is very very important. I'll show you this
strategy would have performed in the past and all the
something in that so today. We are going to talk about
has an edge in the first place. Has it got any? Chance of
likewise, if you're not going to be around when the when the
bothered or be able to watch it to the end quite ironic really
packages go back even up to 20 years, so you can basically
and day one, for example, to see what's going on to see if
exactly is Backtesting Will Backtesting is basically the
Basically, the metrics tells you how the strategy should
perform your strategy over past data to. How it works now, I
thing, but also the practice in execution as well. Some
charting platforms these days, they provide all the historical
one of the most boring Trading education videos that I have
time that you're going to be trading when you indeed start
going live record your Backtesting results in a
description below til next week have a good week and take care.
in conjunction with your checklist checking off as the
Only going to be trading in the UK and European time zone and
make sure you Backtesting the data that's relevant to the
data so you can look back last year 5 years 10 years. Some
looking back at historical data to see how your particular
ever put out there. certainly the topic is far from exciting. Backtesting sounds fun come on. let's get to it. So what
Hi there folks now this week's video is perhaps going to be