Thursday, April 30, 2015

Why test the trading system, or the golden rule of survival in the market.


Studying the various Internet resources devoted to stock trading, I noticed that almost everywhere, very little attention is paid to testing trading strategies. In other words, most traders take their favorite system for service and immediately begin to trade on it.

торговая система


Why is this happening? Firstly, on the issue specifically focuses DC, as it is important that the people as quickly as possible to begin to make a real bargain to get a commission from them. Secondly, the majority of traders banal lazy to test the system on the story, so they tend to start to trade on it to earn more.

To make it clearer, personally, I always imagine any trading system in the form of a large equation of higher mathematics. If you change at least one of the components of this equation, the value of which it would like to change significantly. Sometimes it is very important.
That is why one and the same trading system works Vasya and Petya not. In some couples, it works, and on the other not. At one time frame works, and the other is not. Little change indicator settings and signals have become worse.
Do not take into account candlestick pattern at the entrance, and a long period of time, yield falls. Or conversely, stopped to enter the market at certain hours of the trading session - and the profitability of the system has become just rolls over. From Peter knows exactly how trading with this system, Bob?
In what timeframe, currency pair, with what level of stop-loss, the indicators settings than guided at the closing position ??? Why did Peter, on the advice of Vasey, also immediately begins to trade on it, and the real money? It happens, and vice versa: the system is considered bad and Bob, and Jack, and Dima, but Peter something twirled it, and now it's graph became almost vertical.

тестирование торговой системы

But all the "tighten up". And that's fine. Any trader adapts itself under the trading system. It makes so that it was comfortable for him, combined with his vision of the market.
Why chase trading system on history?
You will see whether the system is profitable. A good trading system is very small. If someone somewhere wrote that this system is profitable - it does not mean that it is profitable. This does not mean that it will be profitable specifically from you. As mentioned above, I have already explained why. All should always be checked.
This will give you confidence. You will know that in the future will still be in the black. Even if now you have seen a series of losing trades. This confidence is an essential component of psychological stability trader. And she found only after you personally drive out the system for a few years and you will see that the graph of the yield goes up hard, despite the temporary drawdown.
You better understand this system. You will understand how it works. No dry description of the strategy, nor view its video review does not give you the understanding that comes during a manual run. We will see her strengths and weaknesses, certain input patterns, which will help to achieve better performance.
You will be able to modify the vehicle for themselves. Most traders experience various problems, such as the exit from the market, with the placement of stop losses. All this is the result of a misunderstanding of the system on which they trade. Watching the system work on a story, you will begin to better understand it, and therefore will be able to adjust to its work and to cope with the challenges that arise at the moment.
trading systems


  1. You can calculate the optimal money management. Just to test the system on the story, you will see the level of the maximum drawdown in pips. This is invaluable information that will help you calculate the appropriate money management. Without pre-test your MM will be either too conservative, and you miss out on money that could earn or too aggressive, which will inevitably lead to critical subsidence of the deposit in the future.
    You significantly save time. On testing the on-line system could take years. Not only do you spend a lot of time, you will be very difficult to analyze the work of the whole system. On such a long period of time difficult to constantly focus on trading, to remember and to identify those features of the system that you will find it on banishing history. If you have already tested or will test the system after reading this article, you will understand what I mean.
    Of course, there are those who argue that you first need to turn out the story, and then watch how the trade can be improved. But to turn out the story makes sense only if you are trading on a particular system, relying in making trading decisions on certain rules. Then, yes, after some time, these rules can already be slightly adjusted. If these rules are not present, then you are wasting time.
    If you follow the rules of the Customs Union, which had previously been tested, the complete draining of the deposit will not be accurate. I even scary to imagine how much money would not be lost on the stock exchange, if everyone followed this simple rule - first test, and then trading.


торговая система форекс

Dealing centers hammer head beginners variety of trading platforms, lots of analytical forecasts, deposit bonuses, special conditions, but it is minor compared to the fact that people are dragged into the market completely unprepared, so that they quickly lose their money there. But this topic is a separate discussion.
Selection of the trading system and its testing history - it is an important and complex work, which ideally should be doing before you commit to the market the first real deal. And by the time of this transaction, you need to be clear, to argue and be aware of each of your trading.
Without this understanding you will trade, "according to the dictates of the heart" and not on the trading system, so that the results are likely to be dire.
This is the most difficult thing - to learn how to make money even before the start of the earnings. Statistically outperform the market prior to the start of the game. And this can be achieved only preliminary run on your system history. The only way you will be able to minimize financial losses in the initial phase, and in the long term to achieve sustainable positive indicators.