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.
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.