Due diligence on a new trading system

Trading Systems
1

Hi all,

I have learnt a trading strategy which I have demo traded for a few months and am happy to now go live with. A key principle is risk management, only risking 1-2% of the total account per trade (quite basic, I suppose).

My question is - when you come across a new strategy which takes your interest what steps do you take to verify it before you go live and risk your hard earned money?

I see on MT4 that there is a facility to backrest but I don’t know how to use it (will search online).

Is there anything else?

I hope to learn a lot in terms of strategies and trading methods from here and elsewhere online but want to be able to verify things for myself.

Thank you,

Xanel

2

Hi mate. You got the first part which is back testing. The next thing to do is forward test. So trade on a demo as you would with a live account going forward. Different people have different thoughts on how long you should do this. Personally I think 20-30 trades then you analyse the trades. If they’re profitable you can go live with continuous analysis.

3

Ok thank you for the advice. I will keep this in mind and look at a few strategies.

Zain