Hi everyone. It is good to be back with you here at BabyPips. I have been busy backtesting adjustments to my current strategy on intraday charts. I never used to backtest my strategies, using the excuse that it was a waste of time, or more correctly, I didn't really have a clue how to do it.
My current mentor scolded me and told me that if I didn't backtest my current strategy, he would not take me on anymore. That was a real wake-up call, to say the least! I was stubbornly refusing to do what was the single most important activity before even trading on demo. I needed to not only test my strategy, but also have the confidence in it during drawdown periods. The real bonus comes when you get half way through and discover a hidden secret that you can tweek to make it almost bullet proof. Too many traders hop from one strategy to the next because when the inevitable string of losses come, they blame their current strategy, only to hop quickly to another one.
The easiest way to backtest is with software specific to the task. Just google "backtesting software" and you'll get several to choose from. Personally, I find it more rewarding to manually test each currency pair using MT4. Use the vertical line to get your time and date. Use red horizontal line for SL. Green line for entry. Blue line for TP. Advance each candle/bar by using the F12 key until either the red line is crossed (SL) or the blue line is crossed (TP). It's that easy. Be sure to log in ever trade just like you would a live trade. The minimum to go for is about 200 per pair. Time consuming? Yeah, but well worth it.
I believe now that backtesting is no longer an option for the profitable trader. If you have any questions or suggestions on how to make it easier and less painful., just reply to this post or PM me. All the best on the charts.