Forex Backtesting
Best Forex System – Beware of Backtesting!
"What is backtesting?
Backtesting is essentially the test of a system trading using historical market prices, to see the profitability of this system can be. The test is usually done with software running trading system through a period of time in the past.
Why be careful backtesting?
Many think that successful entrants backtesting guarantee similar results in the future. This is a big mistake, because a system that has worked in the past does not necessarily work in the future. And this is because the Forex Market is always changing and evolving. The currency market today can be very different from the Forex market last year. The past does not equal the future … if so, we would all be millionaires!
What about trading systems, backtesting successful?
Because everyone knows what has happened in the past, it is easy for anyone to create a trading system that can be highly profitable during that time (in the past.) But remember: we do not trade in the past, we await the future trading. trading systems, backtesting successful may well fail miserably future.
But this fact has not prevented unscrupulous people from selling Forex trading systems based on "excellent" results backtesting. Impressive use hypothetical (ie backtested) results as a sales tool. Unfortunately, many traders buy these trading systems only so that they fail miserably and cause them to lose thousands of dollars.
What I can do to protect myself?
In the search of a good trading system, ask the developer of the trading system if the results are real or hypothetical. Many people assume that the hypothetical returns Returns are real, but that's not the case.
Now that you know it's easy to create a trading system based on backtesting (ie, hypothetical) results, we hope to be more skeptical about trading systems with the commercial results of little or no real.
Summary
While backtesting can be a way very useful to test a trading system, which is definitely not an accurate measure of how the system work for you in the future. Beware of scammers using hypothetical returns to try to sell you something!
About the Author
Harold Hsu is the owner of
http://www.ForexSystemProfits.com where he provides premium Forex trading
information and resources.
Harold is currently giving away a free 26-page report on
how to trade profitably in the Forex market, and you can get it now at
http://www.ForexSystemProfits.com.
Forex Raptor Freeware backtesting with Forex Tester 2
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