Hi there
Quite new to trading (been studying for about three months), but I’m now looking to backtest a number of strategies. My only issue is how to accurately record my trades to show profit and loss. I’ve built this Google Sheet framework for recording my trades, but I don’t think it’s calculating my returns correctly. Would anyone be able to help me with the formulas required so that I can accurately test my systems? I can’t post a link, but if you’re interested in helping, I can send it over.
Some questions
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I’m still a little wooly in understanding position sizes. I understand the theory behind them, but I can’t quite figure out if a position size relates to the currency amount that’s placed, or if it’s an extrapolation of risk, or some other value like lot size? For disclosure, I use a Plus500 demo account, and BabyPips’ Position Size Calculator. I can’t seem to reconcile the amounts that the position size calculator tells me to place with the values in Plus500.
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I can’t seem to create a formula that calculates pip value.
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Do I need to be bringing the platform leverage 1:300 into the calculations somewhere?
In the Google Sheet, I think I’ve got the formula right with Trading Journal - Backtest - BabySteps, but the returns just seemed a little too good to be true. So I messed around with the calculations and tried to uncover what the inherent pip value was for each trade, and now I’ve broken my brain.
Thanks so much
Ciaran