A huge part of my job as a system or algorithmic trader is Back Testing. This is the process of applying your trading rules to past data to see how the strategy “would have” performed.

Possibly.

There is a catch. Back testing will never replicate live forward trading completely, but as you become more experienced you will learn the important factors to look out for in order to make the back test look as close to live trading as possible.

In this video I show you one common mistake I see often made. A mistake which can turn what looks like a great strategy with a nice equity curve into a total money-loser.

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Trading doesn’t always mean sitting at your desk looking at a screen for 8 hours a day. It is very possible to trade successfully on a part-time basis too. You can even choose at what time suits you!

In this video I explain 3 ways in which you can trade in your spare time. All three ways work and I know first hand because I’ve used them all. Watch the video to learn more.

Are you struggling to make consistent profits in today's markets? As a thank you for reading this post I would like to offer you my complete downloadable guide to a very successful system I personally trade and profit from. Just click the download button below to discover how the professionals consistently take money from the markets.

This is the third and final part of this series in which I test an outside bar strategy found on the internet for free, on USD/JPY. In the first part I showed you the rules and then began testing the best time period of the day to take the trades.

The performance was pretty terrible. If you haven’t seen that yet you can watch it here: Part 1

In the second part I looked at the stop loss and take profit levels. After those I introduced a different type of exit. Unfortunately I still couldn’t make this strategy work well enough. Part 2

In this final part of the video I continue using the new exit and try to find the best times of the day to trade. Then I introduce some new filters taken from the daily timeframe. Lastly I put the strategy to test using some out of sample data. Data more recent than the data used to originally test and develop the strategy, to see how it performs going forward.

Finally I conclude with my thoughts on this strategy and this entry signal as a whole.

This is the second part of this series in which I test an outside bar strategy found on the internet for free, on USD/JPY. In the first part I showed you the rules and then began testing the best time period of the day to take the trades.

I used a fixed 100 pip stop loss and take profit to start with. Unfortunately the results were far from tradable! Here’s the link to the first part if you haven’t seen it yet: Part 1

This time I look into those stop and take profit levels and then introduce a timed exit. Watch the video to find out how it works out..

Welcome to the third video series in which I give you an over-the-shoulder look at how I **backtest** and **improve** mechanical trading strategies.

In this first video I begin to code and test a **free trading strategy** found on the Forex Factory forum. It’s a strategy for trading Forex on a 4 hr timeframe. In this series I am testing USD/JPY.

I did a previous series which I used the same strategy but tested on GBP/USD. You can see that HERE.

Long Trades:

- The setup bar has to be above the 30 period EMA on the 4hr chart
- The setup bar has to be an Outside Bar
- The setup bar has to close above the open
- If all conditions are met then buy the next bar at the open

Short Trades:

- The setup bar has to be below the 30 period EMA on the 4hr chart
- The setup bar has to be an Outside Bar
- The setup bar has to close below the open
- If all conditions are met then sell short the next bar at the open

Stop losses and Exits were a little vague. So I plan to test a number of different methods I know have proven to work for different strategies in the past.

Welcome to this third and final part in the series in which I give you an over-the-shoulder look into a trading strategy development process. I test and develop a trading strategy to show you each step of the process. By the end of the development I hope to have a useable strategy, something that you may also consider trading.

In the first part of this series I outlined the rules of the strategy and began the development stages. If you haven’t seen that video yet then you can see it here: PART 1

In the second part I looked into how trading each day of the week effected results. Then looked at the duration or time window we could take the trades. Lastly I introduced a previous day filter. Looking at what happened if the previous day was a white or black candle. If you haven’t seen that one then you can watch it here: PART 2

In this third part of the development I look at the level at which the breakout entry will occur. I use a multiple of the High to Low range. And lastly, once I have some results I am happy with, I go on to apply the strategy to some out of sample data. This is to see how the strategy would have worked in unseen forward data.

Welcome to another series in which I give you an over-the-shoulder look into a trading strategy development process. I test and develop a trading strategy to show you each step of the process. By the end of the development I hope to have a useable strategy, something that you may also consider trading.

In the first part of this series I outlined the rules of the strategy and began the development stages. If you haven’t seen that video yet then you can see it here: PART 1

In this second part I continue going through the development. Firstly look into how trading each day of the week will effect results. Then look at the duration or time window we can take the trades. Lastly I introduce a previous day filter. Looking at what happens if the previous day was a white or black candle.

Welcome to another series in which I give you an over-the-shoulder look into a trading strategy development process. I test and develop a trading strategy to show you each step of the process. By the end of the development I hope to have a useable strategy, something that you may also consider trading.

In this video I outline the strategy rules on the whiteboard then go ahead with the first stages of development.

Even after the first 2 stages, we have the start of a strategy with some promise.

Here’s the rules for the strategy we will be looking at:

We are trying to identify a time window within the trading session where we can take a breakout above the high or below the low of the session so far.

Firstly we start with a 1 hour time window. Let’s imagine our time window is 1am to 2am. At 1 am we look at the high and the low of the session so far. The market we are looking at is USD/JPY and so the session began at 17:00 the previous day.

If within our 1 hour time window the high or low of the session is broken then we take the trade. We go long if the high is broken and short if the low is broken.

We will use a stop loss. And we exit the position at the end of the session. So trades last less than 24 hours.

This is the fifth and final part in this series where I take a Forex strategy I found for free and backtest it. I hope to make some improvements and by the end of the development process it could be a useable strategy.

If you haven’t seen the first part then you can watch that here: PART 1

If you haven’t seen the second part then you can watch that here: PART 2

If you haven’t seen the third part then you can watch that here: PART 3

If you haven’t seen the fourth part then you can watch that here: PART 4

In this video I continue the development process. I change the dynamics of the strategy turning it into a intra-day strategy. I do this by exiting the trades at the end of the day. Again, I will look at some stable stop loss and take profit levels. Watch the video to find out how it works.

This is the fourth part in this series where I take a Forex strategy I found for free and backtest it. I hope to make some improvements and by the end of the development process it could be a useable strategy.

If you haven’t seen the first part then you can watch that here: PART 1

If you haven’t seen the second part then you can watch that here: PART 2

If you haven’t seen the third part then you can watch that here: PART 3

In this video I continue the development process. I continue looking at Stop loss and Profit levels. But this time rather than using fixed pip or fixed Dollar levels, I am going to choose a level related to the volatility of the set up bar. Watch the video to find out how it works.