Unless you are a systematic trader or algorithm trader, then backtesting is crucial because you are trying to apply a generous sets of parameters across different instruments. So, that will allow you to backtest effectively and it is essential to backtest

But as a visual chart trader, you will realize that what happens is that we are like treating each instrument having a life of its own. When you do systematic trading you are treating all the instruments as a basket of similar entities. You get my point?

Yeah, so you’re a visual chart trader, you are actually personalizing your analysis for each chart. But in that case it’s really hard to backtest because you are personalizing for things. If you want to backtest everything on the same parameters, you have to assume that they all are of the same category. 

So the difference for a visual chart trader, is that my suggestion for your case, is really just to foward test from there because even if you spend significant time to backtest, like visually look across the path and then you notice this and you get in and get out, it doesn’t really tell you much picture about whether you are going to be able to be very successful going forward as well with that exact same strategy.

Okay, so my suggestion is just continue to apply and then refine things slowly, gradually from there, as long as you identify what are the issues.

The more important thing is identify what could potentially be the issues with your trades.

In a matter of just because you’re in a losing streak right now or is it because there’s something fundamentally wrong with how you place your entry level, how you place your stop loss level, how you take your profit target and stuff like that.

Interested to receive mentorship opportunities like this with Philip?

Find out more at traderwave.com/innercircle

Philip Teo

Founder & CEO at Traderwave Pte Ltd
Philip Teo is an entrepreneur, speaker and trading coach who specialises in the field of Technical Analysis of the financial markets. He is currently the Founder and CEO of Traderwave Pte Ltd, a financial technology company that offers a web charting application to global traders. He has conducted many trading seminars and appeared on national television before. He is also currently an official speaker and trainer with SGX Academy. Learn more about him at his Google+ Profile, LinkedIn Profile and Facebook Profile

Ready to Trade Profitably?

Get our latest updates and trading ideas in your inbox