Markets are always changing, true. Backtesting allows one to very bluntly determine the versatility of a system while estimating risk vs reward. Im unfamiliar with 'EA's but im very familiar with mechanical systems. Generally, simpler rules are ...

What works, and what doesn't

What do you mean when you say that something 'works'? Everything that 'works' or 'doesn't work' is entirely subjective and based on your beliefs about markets.

What works, and what doesn't

I feel that since money is at stake, nobody should consider trading at full size until they feel they are at Stage 4. I also feel that upon reaching Stage 3, many will truly understand the game of trading and leave.

LFX Trading Proverbs

I don't think there is any strategy that can return a consistent number of pips per month. If that slight variation caused a profitable strategy to turn unprofitable you are better off discarding the strategy completely.

Honing a strategy

I use backtesting as a way of very bluntly determining a strategy's technical validity. You make a fair point about those issues, if they are a concern for you then forward testing is a solution.

Honing a strategy

Well, I guess I'll have to look it up. I've never considered a rotating portfolio before. One more thing, the length of time tested is more important than the number of trades generated in that period. A 10 year backtest of a long-term system that ...

Honing a strategy

But I really dont I dont think forward data would give any unique insight that would prompt a system tweak.

Honing a strategy

So I encourage you to perform a backtest over as many markets as possible and over a long span of time (10 years minimum) and see how it performs. If the results satisfy your expectations then I guess it works.

Honing a strategy

Hmm, what kind of framework could one use to optimize a strategy adaptively going forward?

Honing a strategy

Forward testing (data wise) is no different from back testing. A rigorous backtest is sufficient to satisfy concerns of strategy validity. The idea that using only recent data to test is somehow superior to backtesting is a myth.

Honing a strategy

Yes, thats curve fitting and those observations are quite unlikely to translate into a robust strategy if you perform a rigorous test. When testing your strategy you have to try your best to disprove your assumptions. Its hard to accept but ...

Honing a strategy

Hi Big, Don't take this the wrong way but it looks to me like you are simply curve fitting a strategy to very limited data. I don't know much about the strategy but based on what I can gather here it already seems too 'delicate' for actual market ...

Honing a strategy

Assuming that you are trailing your stops to secure profit and pouring that profit back into the trade; you are increasing your potential profit while maintaining a constant risk amount at the expense of your position in a trade. If the trade goes ...

Reverse Engineering a Profitable System (REPS)

The kind of prediction that I am saying is unnecessary refers to the prediction of future price direction and magnitude of movement. Robust trading strategies tend not to rely on directional accuracy nor do they attempt to estimate the magnitude of ...

Just a bit of advice, for anyone, for free

You don't need any special knowledge. Just a method of risk management that suits your style.

A jump to the beginning - chaos and market forces

Its very hard for me to explain. I highly recommend reading Market Wizards by Jack Schwager. His interviews yield timeless lessons. Start by noticing what all the great speculators had in common.

How to start like a pro? - afraid to open trades

The point im trying to make is that it is not risk free even though it seems to be. On the surface it looks that way but on the portfolio level you are undertaking more potential volatility. Personally, the test that I would use would be to assume ...

Reverse Engineering a Profitable System (REPS)

I would backtest the strategy first if I were you. Your net effect seems to be a system that fades momentum and doesn't cut losses.

Going long and short at same time, a grid with hedge

Most retail traders aren't profitable for many reasons other than the actions of large banks. Based on what im seeing, most of them do not understand the way the game is played.

Do You Know Any Millionaire or Multimillionaire Forex Traders?

It is completely up to his personal perception of the market.

Can you tell how the fundamentals are from the monthly chart?