Hi All,
Ok, I know this is an insane statement, but I only know it because I have read it a lot, I don't really know why! It seems at first glance that if it you can find a system that has worked consistently for the last 4 years (back tested), then why wouldn't it work moving forward. Even if market conditions change, forward testing isn't going to help, because they could change after you finish the forward testing. What is the difference between forward testing 3 months, or doing nothing for 3 months, then back testing those additional 3 months. And if there is no difference here, why not just pretend you thought of the system 3 months ago, and be sure and back test those last 3 months (as well as more) and that can be your forward test.
Ok, I am getting a little silly, but you get the point. I am sure I am missing something here... what is it?
Ok, I know this is an insane statement, but I only know it because I have read it a lot, I don't really know why! It seems at first glance that if it you can find a system that has worked consistently for the last 4 years (back tested), then why wouldn't it work moving forward. Even if market conditions change, forward testing isn't going to help, because they could change after you finish the forward testing. What is the difference between forward testing 3 months, or doing nothing for 3 months, then back testing those additional 3 months. And if there is no difference here, why not just pretend you thought of the system 3 months ago, and be sure and back test those last 3 months (as well as more) and that can be your forward test.
Ok, I am getting a little silly, but you get the point. I am sure I am missing something here... what is it?