When you're testing trading strategies to gauge their profit potential, backtesting is a crucial step. But it's not enough to just stop at the total return of a strategy in backtesting. There are many metrics that should be studied to assess the viability of a strategy, and if it will meet your goals. A Monte Carlo simulation is a mathematical technique that can be used to stress test a trading strategy. It runs backtesting results through hundreds, or even thousands of possible scenarios, which helps traders uncover weaknesses and potential issues.  I've found Monte Carlo simulations ve ..read more

In trading, backtesting and forward testing are essential methods for evaluating the potential success of trading strategies. Backtesting allows traders to assess how a strategy would have performed in the past by simulating trades with historical data. Unlike backtesting, forward testing involves trading a strategy in real-time with live data in a demo account, without risking real money. These often seem like optional steps to newer traders, or an either/or scenario. But in this article, I'll show you why they are both necessary in the development of trading strategies and cannot be skipped ..read more

Backtesting is the best way to verify that a trading strategy has an edge and optimize that strategy to meet your goals. Despite its importance, backtesting does have its limitations. The primary constraints of manual backtesting are that it requires discretionary input from the trader and is not highly scalable. Automated backtesting is limited by the quality of the code and it lacks flexibility.  I've been backtesting since 2008 and it has helped me tremendously and has helped countless traders that I've met over the years. My goal in this article is to help you understand the details ..read more

Backtesting is the systematic process of finding out if a trading strategy has worked in the past and therefore will be very likely to work in the future.  This is the most important step that a trader can go through to prove that their trading strategy actually works. Yet, so many aspiring traders miss this vital step. The best part about backtesting is that you don't necessarily need to know how to code to backtest. There are many fantastic options for coders and non-coders alike. So if you want to skip the pain of years of losing trades and blowing out accounts, keep reading to learn ..read more

When you buy something through one of the links on our site, we may earn an affiliate commission. In my experience, backtesting a trading strategy is an essential step before deploying it in the market. It allows me to assess how the strategy would have performed in the past, giving me a clearer idea of its potential success in the future. Manual backtesting is great, but automated backtesting speeds up the process considerably. There are three ways to automate backtesting of a trading strategy: learn a programming language, use pseudocode software or use no code software. Each one has pros ..read more

? When you buy something through one of the links on our site, we may earn an affiliate commission. Are you tired of losing money on trading robots that promise you profits, but never deliver? Look no further than this article, where I will share the truth about which trading bots actually work and how to find one that fits your unique personality. Many fully automated bots fail for a variety of reasons, including over-optimization, poor instructions, and even fraud. However, there are three types of trading bots that actually work: those you build yourself, those created by a proven trader ..read more

When you buy something through one of the links on our site, we may earn an affiliate commission. In the early days of my trading journey, I used to get very discouraged during a drawdown. As soon as I hit a drawdown, I would assume that the strategy had stopped working and would jump to a new trading strategy. That's the last thing we should do as traders. I've learned a lot since then and I want to help you avoid this mistake by giving you the tools and techniques to properly overcome the natural doubts that come with a drawdown. The optimal trading drawdown psychology is to examine the dr ..read more

When you buy something through one of the links on our site, we may earn an affiliate commission. The fantastic thing about trading is that you can do it from anywhere in the world.  I've traded from places like London, Finland, Estonia and Hawaii. So in this guide, I'll give you my personal picks for gear I've used in my trading travel setup. This stuff will help you travel light, but enjoy all of the comforts of home. I'll also provide a couple of picks that I haven't used, but many other traders really like. Computer Gear First up are the most important tools for a trader, a laptop a ..read more

If you want to become a successful trader, it's important to understand the two primary types of trading strategies: discretionary and mechanical. Not understanding which one you are actually using can lead to unrealistic expectations, missed opportunities, and the belief that a strategy doesn't work, when it actually does.   I failed to understand how important this concept is when I started in 2007, so I want to save you a lot of time and frustration by helping you understand it right now. Key Takeaways There are two main categories of trading strategies: discretionary and mechanical ..read more

If you're not sure about paying for FX Replay or you're already a user and are looking for something different, then this short list will show you the best alternatives that may suit your needs better. I've been using and reviewing trading software since 2007 and my goal is to give you the best FX Replay alternatives based on my experience, and help prevent you from wasting your money on inferior products.  I'll provide both free and paid options. Alright, let's get into it… The Bottom Line If you just want a summary of the details below, here are my picks for the best free and paid alte ..read more