One of the many wonderful features of Automated Trading/Testing software are the numbers in the performance report. Understanding even just a little about what some of these numbers mean can save you from ploughing money into what looks like a great trading strategy.
I have created a video to show you a little more about some of the important numbers and the impacts on overall profit.
I found a free trading strategy on the internet. The rules were well documented and I decided to code and test it for myself. I always find it extremely interesting to test strategies other people are promoting.
In the video I show you the results from the strategy tested on GBP/USD. But the principle applies to any and every market. Once I have the results I show you the performance report along with the equity curve and some important numbers.
Within the software (I use Multicharts by the way) it is possible to add trading costs like commission and slippage to gather more realistic results. That’s what I do next. I think you will find the results interesting!