I’m trying to manually backtest my price action strategy, that replies only on few indicators for signals and I don’t know how to use mql not do I have the time to learn right now, but has anyone that manually backtested their system gotten tired of backtesting, I’ve only done three pairs for the month of May 2020, but I’m tired already…
Hi, Price Action is very hard to code and every code is custom. I don’t think so, you will find solution. Regards Greg
I only check a TA-based strategy on one pair unless it works due to some unique property of a specific pair. Surely what works on USD/JPY would also work on GBP/CAD or EUR/CHF, subject to comparable market conditions (trending, ranging, average volatility etc.)
There are very few strategies unique to one pair - e.g. the London opening range break-out strategy for GBP/USD.
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Thanks @tommor I have done about 50 backtest trades now, with an okay result, do you suggest I move in to demo trading now? I have seen that pairs act different in the Asian sessions, I also want to confirm this, it seems like pairs with the JPY or pairs that are active in the London session move well in the Asian session but USD pairs that are active in the US session move very slowly, am I correct?
Yes I think that’s broadly right. I don’t see anything moving as well in the Asian session as in the London am and then the London pm / New York am overlap.
Backtesting is good but remember your strategy only needs a modest statistical edge above 50:50. So let’s say it has only a 55% win rate and a r:r of 1:1.5 and a risk per trade of 1% of account capital and you only trade once per day. All pretty unambitious numbers. But if you can keep it up you will be wealthy.
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I was also wondering how to spot crazy volatility in the market, with hindsight it’s easy to see but it’s hard to know when the market has become volatile in real time. How can I go about this, as my strategy doesn’t do very well in very volatile conditions?
You could try adding ATR as an indicator. Reduce the ATR period (default is usually 14) if your strategy is very very sensitive to changes in volatility.
Ahh, so true! Just have to be patient
I will try this, but then what signals to me that the market had become volatile from the ATR?
ATR is displayed as a separate indicator line chart. You will see when the line trace suddenly jumps from its recent normal level. This would indicate a sudden rise in volatility. You can re-set the ATR period to whatever number of bars you wish, reducing the number makes the indicator more sensitive. Of course, you’d have to be watching the ATR chart to see this happen.
Try your hands on different strategies. We cannot control the volatility in the market but we can change our strategies. Trying out new indicators and seeing the results would help you here. Being patient and calm is definitely required in volatile conditions.
for manual testing there are several software available out there you should check those out.
The pairs act differently through the sessions like you say, but it’s not always consistent. It depends on what the underlying confidence of the market is. Lately, pairs have been moving a lot through the asia sessions and less through London. That’s not normal, but it seems to be happening a lot at the moment.
The other thing to be careful of is the trend completely changing as sessions change. I’ve been caught out a few times by waking up and thinking Asia bought this so I will, then London knocking it right back down where it came from. Mike had a thread where he used to break the market down into 3 sessions to see what was happening.