I'm not an expert at backtesting. I did some with TradingView by clicking on Indicators then Technicals then Strategies. Then I chose the MovingAvg2Line Cross. Anyway, it doesn't have a setting for stops but if I wanted to learn how to do it, is it worth it to do backtesting with stops with a moving average crossover system? Like say 4 and 10 EMA with 0.3% stops and 0.9% profit targets. Would the stops totally interrupt the signals and make it unrealistic?
I think it’s not worth it but setting fixed limits (TP) and stop based on percentages isn’t that complicated. Give the script to chatGPT and tell it to add what’s missing. Might work as planned, with some luck, out of the box. Tell it to draw TP and SL so you can visually check if it’s working as expected. Maybe use a multiple of the ATR for targets instead of raw percentages.
First learn coding Then code a million strategies and backtest them, using demo money. Without STOP LOSS you can make a strategy that can win for 1-2-3 years. By learning coding you learn trading also as you observe your codes working on charts and you add thought in the code. That is the only way to make a successfull backtest for more that 1-3 years with SL
Run an unconstrainted backtest for all tickers and review the results by sectors and industries. This should give an overview of the strategy effectiveness.
Unless you are composing tick by tick bars of i.e. example, 5 minute bar, you can't tell if a high was made first before short entry or you entered on short and stopped out as highs was made after.
Definitely worth it. May change the dynamics but will definitely help in risk management. I hope you are making sure that the stops fit the pair's volatility.
Well, I meant I wanted to do the backtesting to find out what size stops and profit targets to aim for. Anyway, there's an indicator in TradingView that allows you to backtest without converting a indicator to a strategy. But is there a video on Youtube that shows you how to use this? https://www.tradingview.com/script/5pPxIL4o-Backtest-any-Indicator-v5/
I haven't seen a ma strategy that actually backtested well. If you sign up for barcharts excel you can download data with the moving averages included. I'd recommend including the DIFA (distance from the moving average) and include that in your testing logic. If you use the MFE and MAE (which you can then make an MFE/MAE ratio out of) from a lower time frame you could probably get pretty close to approximating what's happening on the far right of the chart. and get an idea for what the risk reward is a different places. The problem with backtesting in pinescript is that the entries and exits aren't always realistic. They've tried to improve it but allowing you to use lower timeframe data for the entries and exits but it's still pretty bad.