Backtesting is useless

What are you talking about? lol. My trades are mostly backtested. I only disagreed with your hypothetical backtest result of 5 trades for the past 5 years. Too little trades. You can flip a coin 5 times and it lands on heads by chance. That's why I mentioned I will consider it if there are enough trades. Substantial enough not to be fooled by randomness.

 

Hindsight bias all over the place. Even that trading system could be a huge winner in the next 10 years.

 

Sure, losing systems magically become winning systems in the long run.

 

Everything you think you know, you know because of the past.

Unless you are an extremely intuitive person or a clairvoyant, of course.

 

And humans usually think they know more than they really do just because they can explain a past event.

 

Depends on if you are a farmer or a hunter.

For farmers, backtesting is critical to check out your thesis of what to farm, when to farm and what fertilizers, etc.

For hunters, it only tells you where your targets generally congregate, where is a better place to hunt for black swans but don't expect you will bag one anytime soon.

 

And sometimes they go broke for believing that. But the remaining ones will still have based their decisions on the past.

Overrating the past is easy, but along with our sensations is everything we've got. So it's a matter of taste. Which past information do you prefer?

 

We should recognize that everyone is not doing the same thing, even though it's all called, "backtesting."

Just because one person is unable to benefit from "backtesting," doesn't conclude for the universe that, "Backtesting Is Useless."

Now, if the original hypothesis by the OP were instead, "Backtesting is useless for me;" then it would be hard to argue against such an assertion.

 

Even this idea does not make any sense at all.

Trading without backtesting the system first is like jumping from a plane and THEN checking if you have a parachute.

 

It may not make sense to me and you if someone claims, "Backtesting is useless for me."

But my point is that you can't successfully argue against that assertion. We can't determine what is useless, or not, for others; regardless how useful it may be to us.

If you give someone a super duper tool--whatever it is, and explain to them how it works, and they claim, "it is useless for me." Then we have to conclude that that is a true assertion.