Forex Trading-How To Build A Trading System (Part 3)
Now you've got a trading system all coded and you know that your entry is producing better than a random entry into the market. Excellent.
If you haven't already tested it on as much market data as you have available, now is the time to do so. That last thing you want is a trading system that works great on the EUR/USD, but fails to trade the GBP/USD. Something isn't right there. That system is going to blow up sooner or later. A robust system will trade all actively trading currencies with a profit.
After you've tested it on all kinds of data and it's working well, the most important test comes next. The walk forward test. Set up a demo account and have the system demo trade the market live for at least two weeks.
How did it work? Did it mess anything up?
Review the trades and perform any maintenance on the system. N.B. I'm NOT talking about optimizing the system at this point. I'm talking about technical failures in the code itself. These will show up. Better to have them show up on a live forward walk test that a live account with real money!
Now for one of the most important questions of all, even though this system worked, will it fail in the future? Trading systems do that. You don't want that to happen to you.
I'm going to tell you a dirty little secret that you can use to make sure your system is good. It involves work. You decide if it's worth it. Trade the system on futures and stocks. If it holds it's own on the other markets, I guarantee you that you have a winner.
Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".
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