I will probably be crucified for this post, but I really come with the best of intentions. I believe that in the 21st century no one should trade manually. Manual trading cannot be reliably back tested, so it is actually worse than gambling. At least when we gamble, we know what to expect and the outcome is fast. In manual trading, it can take many months or more, to see that a strategy is bad. Through back testing it can take minutes to filter out such a bad strategy. Instead of wasting many months on one strategy (not to mention all the frustration if it fails) you can use this time to back test hundreds strategies and find the one that really works.
Please don’t be scared of Expert Advisors. It’s the 21st century and it would be unwise to ignore the amazing technology that we are blessed to have.
Code your strategies - make them to become EAs and then you can back test them and see if they really work. Nowadays, you don’t even need to hire a programmer for that. Different AIs have amazing coding capabilities.
I coded several of my strategies with the help of Claude. It wasn’t easy to make it understand me, but it was worth it when I saw an EA that performs my strategy perfectly!
A moving average crossover can clearly be backtested (and countless examples have been, both in academic circles and by trading authors as well established and respected as Van Tharp) and it can be traded reliably either manually or with automation.
(I’m just offering the simplest example I can quickly think of: I’m not suggesting that it would actually be a sensible approach to entering trades.)
Thank you for this great example! Considering that a simple MA crossover EA is the simplest to code, why would anyone work so hard and back test this strategy manually? It would take ages. Such simple strategy requires lots of parameters to test: different types of stops, trailing, let alone the MA settings itself. The full manual backtest of such a strategy one year back would take months of sitting in front of the computer. And why? When this can be done in couple minutes! Do traders not appreciate their own time that much? And I can guess that no one would even try to perform a full manual back test of the crossover strategy. Otherwise more people would know that it simply doesn’t work. Back in the day when I started back testing strategies, it was the first one I tried, and immediately saw why so many traders lose money.
You had said that manual trading can’t be backtested, so I asked why not, and mentioned that a MA crossover can be traded manually and that it can clearly be backtested (and often has been)…
I agree that FULLY manual trading cannot be backtested. And of course it follows that if you don’t know what you have done (or would have done) you cannot improve it.
