Backtesting is sooo confusing , anyone got a good guide to learn how to do one?

Discussion in 'Forex' started by Wach80, Jul 6, 2016.

  1. Wach80


    I have read several sites but it seems a rather confusing process , it seems most are using excell for this , they transfer the whole market data to the spreadsheet (no idea how to do this and is it all the data from past?) then they write their trading rules.... no idea how to write a strategy and then transfer to the spreadsheet , generally i dont understand anything , im not too bad at coding but i dont seem to get it.
  2. radex78


    I am also lack understanding how to use spreadsheed on excel to look backtesting, usually if look backtesting result only look on the graph with use drawdown to look profit and loss during backtesting
  3. userque


  4. 2rosy


    most do not use excel for this. Since you can code then program it.
    1. get data timeseries
    2. iterate over it
    3. on each iteration execute your logic
    4. calculate position/pnl/risk ...
    Pro_Trader720 and CME_Trader like this.
  5. Why so complicated..? I print charts out week after week, and review my trades and go over patterns with a pen and ruler.
    murray t turtle and Niten Doraku like this.
  6. userque


    For me, the backtesting is connected to the machine learning algo for optimization/validation, etc. purposes.
    CME_Trader likes this.
  7. 1- look for those setups which priced moved significantly
    2- look for what all of step 1 setups have in common
    3- concentrate on minimizing draw downs
  8. always consider that backtesting & live trading have very different results .
    you may have a great profit on a backtested strategy and when it comes to reality that strategy yields a negative expectancy .don't underestimate losses .after 3 or 4 loss in a row, your mental mechanism doesn't let u enter another setup .
  9. Wach80


    i think i found something , i dont know the algorrithms though , anyway in order to start i need historical prices for forex , yahoo finance doesnt seem to have them , it got only for stocks ,anyone know a site for forex?

    From what i see , next to the close price data you type the algorithm to express whatever condition you want then it calculates that for all trades , for ex , what should i write next to the close price to say *buy over x trendline* , i dont know how to translate that into algorithm.
    Last edited: Jul 6, 2016
  10. maler


    I tried some brain surgery on my cat the other day but it did not make it.
    Do you have any tips for brain surgery?
    Last edited: Jul 6, 2016
    #10     Jul 6, 2016
    d08 likes this.