Hi from a new trader

[brownsfan019]

	Quote:	hechua
	A successful trading system after back-testing shd work in real trading. If it does not work is because the trader does not follow the rules of the system.

Not sure why this thread was dug up, but since it was - your statement could not be more wrong. Just b/c something backtests well does NOT equate to a profitable system going FORWARD. Contrary to what you read in the books, backtesting may help (or could actually hurt) a possible new system but since it is based on purely historical data that means little when the future is unknown. There are plenty of possible systems out there that backtest well and perform poorly live and vice versa.

If it was this easy, we would all be multi-millionaires here.

I'm amazed at what I read sometimes...

[hechua]

	Quote:	brownsfan019
	Not sure why this thread was dug up, but since it was - your statement could not be more wrong. Just b/c something backtests well does NOT equate to a profitable system going FORWARD. Contrary to what you read in the books, backtesting may help (or could actually hurt) a possible new system but since it is based on purely historical data that means little when the future is unknown. There are plenty of possible systems out there that backtest well and perform poorly live and vice versa. If it was this easy, we would all be multi-millionaires here. I'm amazed at what I read sometimes...

Trading is a game of probability and for sure nobody can predict the market with certainty. As you'd said future is unknown, therefore, trading with a system based on backtesting on historical data is better than trying to predict the market without any research.

I did not say backtesting well must equate to profitable trading going forward.
What I'd said was that if you've a good system based on backtesting and if you do not follow the rules religiously, your trading will probably not be profitable.

Please don't be amazed at what you'd read anytime because many traders succeeded in trading by many ways, As the saying goes, there are many ways to skin a cat.

Trading systems may be easy but many traders find it very difficult psychologically to follow the systems religiously. As such, not many traders will become multi-millionaires. Just like playing golf is physically easy, swing and hit but not many people can be like Tiger Woods because not many people are prepared pyschologically to train for it.

[Nick1984]

	Quote:	hechua
	Hi keymoo, Welcome on board. A successful trading system after back-testing shd work in real trading. If it does not work is because the trader does not follow the rules of the system. Besides, don't trade on systems developed by other people. The systems probably are not appropriate for you in terms of risking-taking, time-frame, volatility, etc.

Hi late to the party Charlie. They say that the ability to take notice of detail is important in making it as a trader, especially importnant numbers and dates!

[torero]

backtesting is just one piece of the puzzle. Forward testing (forward walking) is essential. When I first started, I made this mistake of blindly traded the system I tested with nice results but failed miserably in real time, even when I followed it religiously. Nothing compares to real time testing, even then, there is always changing condition that will get kinks in the system that will. Systems will succeed at one time or another, but it fails too. How the trader deals with that period is crucial? Should he optimize it? Retest? Cut down the number of contracts? All these make a difference in making or breaking the system.