What is a non programming platform I can use for backtesting? Also, what should I keep in mind while backtesting to make the results more realistic and reliable? How can I optimize my strategy using backtesting?
well, you dont need 20 years of data to confirm the effectiveness of your strategy. that will only waste your time. what matters is the wealth of information you are able to amass within that timescale you dedicate your time to.
depending on the preferred timeframes and strategy, you should bactest 2-3-months of data for scalping, 5-6 months/1- year for intraday, 3-4 years for swing.
the data to fetch should be:
time : how well your setup works on certain time periods
catalysts: what validates and invalidates your setup
reaction: between your indicators and chosen concepts- eg how does price react to psychological levels, EMAs and stuff.
risk management: what is the amount of pips that will sustain a position without stopping you out prematurely, what profit level is most achievable. to avoid price going back to hit your SL.
trade management: at what level or amount of pips should you scale in or take partial profit, depending on your trading style.
market behaviour: get acquainted with certain market patterns before and after a trade to reduce the fear of uncertainties, eg. seeing a double top or bottom after entry does not neccesary mean a reversal because your backtesting told you it occurs before it hits your second TP, stuffs like that.
total trades within a time period: how many trades on average should you be expecting within a minute, hour, day, week, months, year. this data will help you provide viable stats to avoid over trading.
remember, the goal of any good strategy is to minimize losses and maximize profits. so as you bactest, observe why you lost a trade and try to see a hundred possible ways to minimize losses in the future, this information will grace your entry model with the uniqueness it requires to stand out among its identicals and increase the odds of winning to your favour.
bactesting does not offer the psychological feel of the market, so for me, i use a sstem i call PPR(possible psychological response) be honest with yourself, if you were trading live, what would have been your reaction to certain market behaviours, then create rules around them.
record everything on a journal, even the detail that feels useless, trust me its not.
Sorry this had to be lengthy, and truth is you have to see this with subjectivity and I really hope you can pick a thing or two from this.
I sincerely wish you goodluck.
MT5 has a built in Strategy Tester. You’ll have to download an Expert Advisor that most fits the strategy you choose.
Always use Real Ticks as data source from your broker. Do not use Calculated Ticks or OHLC.
The Strategy Tester has Optimization built in. Ie; a moving average crossover strategy. Choose a range of moving averages to test. It will run through every scenario. Then you’ll be able to choose the most optimal criteria.
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Thank you for sharing your thoughts. But as my strategy can not be programmed using MQL, I can’t use meta trader.