Back-Testing Jam Session: Forward-Testing and Back-Testing – Forex Trading Strategy

today we'll talk about the topic of fullretesting as well as back testing so last time we had taking a look at thestrategy and the strategy was to look at the DD candlesticks and based on the DVcandlesticks we were going to figure out what the market direction would be andbased on the market direction we would enter the trade based in that directionthat we are expecting the price to go to now there are two aspects of testing oneis back testing so we're going to use of a Forex tester software program for thatand it has history for many many years going back many years so we'll use thathistorical data to figure out what's going on so we'll take a look at itwe'll take a look at price action and that's the only thing we are looking atwe at this point we will not be looking at any sort of news we will bediscounting all the fundamentals so any any rumors comments news anything likethat that came out will not be or will not go into our our testing here at allwe don't know what happened in the markets so they're there so it's not aperfect system so we don't and we cannot take those into your account so thingsour stats wouldn't be perfect but still it will give us a solid base for howoften we can get the direction of the market correct and then we're going tolook at our forward testing second so this will start next week but today Ijust wanted to lay the groundwork to talk about what how will be over testingso forward testing essentially is a testing the the strategy under livemarket conditions so for that everyday what I will do is I've created aspreadsheet here so market analysis spreadsheet here so Ihave all these different pairs that I look at every single day and then Idefine market direction based on the price action for the day and then wealso take a look at potential entries and stop loss and take profit targetswhere I'm expecting price to go to whether it's a long entry or short anentry we also count for news and then at the end of the day we will put in anycomments about any let's say speeches or comments or news that may have impactedour trading here that may have changed the direction of the trade so this isour forward testing and actually before we continue on but so this will be whatwill be using going forward so I was supposed to start doing this or sharingthis with you this week but last time we could not you could not see my screenand that's why we kind of got delayed with this one so I won't do thistomorrow because tomorrow the last day we're gonna we'll be doing five sessionsagain then we'll start again next week so we'll do this going forward startingnext week starting Monday of next week and then for now we will just test thestrategy just as is on the Forex faster so we'll just do back testing for nowbut I just wanted to give you the framework that I'll be using goingforward so starting Monday I will fill out these and so we'll do one for theweek and then we'll break it down on a daily basis and we'll go with that sothis is so this is the framework that we'll be using but before we go on I doneed to do the disclaimer so just a quick disclaimer all of this is foreducational purposes only I am NOT an investment advisor and I do not have anyidea of your individual investment needs so I will not be able to provide anyinvestment advice so all of this is just for education purposes and so and justremember that treating is a risky business so it's very important to becareful when you are trading all right so let's jump on to our Forextester here and we will get started okay excuse my Clyde you scoped air justwanted to make sure we are I'm sharing the screen here all right so let's go onto the Forex tester so in the Forex testing tester here I do have I'mlooking at pound US dollar here and I have downloaded the data for pound thehistory data here from 2010 all the way to 2018 there are some spots missinghere that's okay so let's go on and we'll call this so today we'll just havefun we'll just take a look at Kong dollar and we're not exactly taking tonof trades here we'll just be guessing the directions will display again and itwill be guessing the direction of where the markets gonna go so let's take alook here so yep so we'll start from 2010 that's where the data is from sothis will take just a couple of minutes here to generate our a tick so whilethis is doing that it will just give it a minute here let's notes so I can'tmove anything while that's going on all right so we'll go back to that so we areable to see it and I'll share the spreadsheet that I'm using for theanalysis if you guys wanted to follow along and see you know if if youranalysis matches up with as we do our forward testing and you can do that I'llpost it in the Facebook group later on so we'll we'll have that as well as aresource so you guys can test along with me as we are doing thisand so just while this is downloading another point that I wanted to share isthat forever testing the just as important the back testing is full thetesting is is very important as well and it's a good idea to do your testing notunder live market conditions because when we are trading under live marketconditions and we have a trade on our perspective is skewed so we of coursewant our trade to win as a result of that we are we are not in the in theperfect frame of mind to make sure that we are able to we're able to look at itfrom an impartial perspective because we are so focused on getting a certain typeof result from our own trading and our perspective completely the skewedperspective will have negative impact on our on our testing so we want to makesure that testing is done with an impartial perspective and it's doneoutside of our trading hours that's why I do the live sessions at this time ofthe day because I'm not trading at this time it doesn't matter how we're lookingat the market we can look at look at it with the impartial perspective and themost of the trades have already played out one way or another so there isreally no there are no emotions that are involved while we are doing this so whenwe are looking at the results of our four tests we'll do that starting nextweek so when we look at the at our results it will have played out one wayor another so the targets may not have reached completely but the trade itselfthe market direction would have played out a one way or another so that'ssomething to keep in mind we always want to do our testwhile we are while we are not under the pressure and we are not we don't haveour perspective skewed because of the trades that we may have on so with theforex tester here this is a software that I'm using and I'll post a link toit in the in our trade sorry in our Facebook group as well if you want totest this out I think they gave a trial version of this as well if you use thethe link that I'll provide is an affiliate link so if you do use thatlink and you get a discount on the on the software this is a software that Ihave used previously for the testing so I do like it the way this one worksright now what I've done is I went to the data center the Forex tester – whichwas the older version of this had two different places where you had todownload the history and then you had to go into your testing phase and thenstart your test with this one there's just one mode so you go to the datacenter and you download the data for this one I have downloaded a lot of databecause we are going a one full day at a time so each bar will be a daily bar soit will capture a full day's worth of activity so as a result of that I havegone back quite a bit and that's what we are we will be looking at so looks likemy terminal here may have been disconnected okay let me go back here so we lookslike it's almost done we are at about 80% I was trying to download the dataprior to our a meeting here but because I'm going going backwards a lot it takesa while to download this data and now after we download this data from thedata center then we have to generate these ticks and the way we generate theticks is by clicking on new project here and we give it a name and then we justclick on generate ticks for the pair that we will be working with so in thiscase I will be working pound US dollar and we'll be starting atabout 2010 March of 2010 so we have data all the way from 2010 to 2018 so we haveeight years worth of data that we'll be working with which is which is a niceamount of data but it will go through that or we'll go through that fairlyquickly because each candlestick is a day so there isn't a ton of our you knowso we were not we're not sitting there for a large amount of time okay we'realmost done any questions while we're doing this so the daily daily candlestick is thestrategy that will be testing right now once we are done with testing of thisstrategy we'll move on to another one which will be the rank of bar so foraccessor also has Renko bars on the on in its software so we'll take a look atthat Renko bars are nice because they don't take time into account they'remore range bars and once we get into that strategy we'll take a look at thatso one of the good things about Renko bars is that it helps us to stay in thetrend a little bit longer and so we'll we'll see how that works as well soGregory yes we're using Forex tester for back testing so we'll be doing acombination of back testing and pover testing I have this spreadsheet thatwe'll be using for our full ver testing so every day I'm going to fill out thisspreadsheet so this is when I do as part of the trade room when I do the dailymarket analysis call I generally go through all these different pairs and wetake a look at what market direction we'll be so the next day I will besharing this spreadsheet and we will basically look at actual versusprojected so what were we thinking that the price will do or what was ourprojection and and what the reality was so what happened where did the priceactually go so this will be a forward testing method that we'll be using sothis way we take a look at our live market conditions we know exactlybecause it's it's live there's really there's you know everything kind of goesinto it so if there's a piece of news that comes out or something that changesthe direction of the market we'll be able to take that into account as wellso everything will be taken into account whereas when we do back testing none ofthe fundamentals or the news of the comments rumors none of those play arole in the back testing because we don't have any of that informationavailable so if price moved let's say very very rapidly one day all of asudden they change direction we wouldn't know why that happened butwith a full retesting because it takes into account who are we will be takinginto account all that information we'll be able to have more precise testingessentially and but what we'll do is we'll take a look at all these pairs orI'll be taking a look at all these pairs I will post this template in theFacebook group so if you wanted to follow along you can do this that aswell so based on the spreadsheet basically what we're looking at is thepair for each pair we project the market Direction where I expect the market orthe price to go and then potential entries whether if if the marketDirection let's say right now for your dollar is short then we'll be looking atwhere the potential entry would be for that show trade with the stop loss andtake profit targets would be any news that are coming down we'll put them inhere and then any comments if something happened during their date let's saysomebody was speaking ECB comments came out or something how like that happenedwe'll put those in here as well so basically the goal will be to doprojected versus actual what we'll be projecting the day before so the nextday I will post when I do the live I will post this the next day so that I'llshow you where I was projecting it and then we'll take a look at where itactually went so we'll do the forward test this way and this will be anongoing thing because as we are doing it live it will take time for us to gatherthe data then we'll have some stats on how many days we were actually right andwhat happened why were we not right the days that we were not right and thenwe'll just have all of that information with us but in terms of this softwarethis is the Forex tester that we'll be using so it's called Forex tester 3 andso what I did was I just went and downloaded the data here so I'm gonna goto so let's go so I'm gonna pause that I'm gonna go to instead of one minuteI'm gonna do a daily chart here so we'll go one day at a time okay so I'm goingto pause it and let's make it bigger so as we can see here each of these is aone day's worth of data and we are starting in March of 2010 so we arestill March April okay so let me quickly change the chart properties here I don'tlike that black color so I'm going to change this the candle up here will begreen and candle down will be red so candle fillerI need the filler to be green for the up candle and so this one is just a littlebit easier on the eyes okay so this is what we have this is where we arestarting so right now because we are at the right at the beginning here we don'thave too much support and resistance so let's see what we do have in place we'llstart with that and then we will as we continue on we will will see as thesupport and resistance develops so we have a one month's worth of data herethe daily candle states so we'll start here and I will go one bar at a time sotoday it's just a guessing game and we're not keeping any state any statsbecause I'm not entering any trades just yet it's just a matter of actually justseeing if you're right or wrong so that's it's just the I think of it as asimple game so that's how we're going to do we're going to project the directionof the market and then if and see if you're right or wrong okay so with thisone what we have here is an up move we had a pullback price moved up and thenpull back off of here and then it has moved up so right here we haveindecision candle so when I do the daily market analysis and not only do a lookat what color the candle close but I also take a lookwhat the candle looks like so this candle here this candle here is anindecision candle we have pins on both sides and we have a small body here sobasically it means there's a bit of indecision in the market at the momentso going forward here it could go both ways so this is what the candle thiscandle looks like this candle here see how we pull back and then went out sowith this one as well we could see the price go in either direction so when wesee a candle like this on a daily chart I would generally not trade this chart Iwill look for something else somewhere another chart where the candle is likethat so we don't have to trade every single pair every single daythe idea is to pick two or three best charts or best candlestick patterns thatwe see on a daily and trade those so this one would not be best one so Iwould pass on this or I'm going to go to the next candle and then decide whetherI would engage in a trade so now we have a candle close right into the supportlevel here so we have a bearish candle close so based on the bearish candleclose my projection for the market direction would be to the downside butwe are into support so this could turn around if it doesn't clear the bottomhere so if I were to take an entry for this one I would look for price to breakbelow the low do a backtest effect so I would go to a smaller time frame I willlook for price to push into this resistance line here our support turninto resistance once it holds below this I would take a trade short but based onthe daily calendar close here my bias for the market direction will be to thedownside but under live real market conditions Iwould just wait to take an entry so right now we're not actually taking anyentries we're just playing a guessing game so because we're just playing aguessing game we are just so I'm going to say market direction is to thedownside so let's see if that works it is surprise drops right into our nextsupport and resistance level and then the price pushes up from there so ourmarket direction was correct so now we have a bullkondeh close here but we have our resistance right there so marketDirection is bullish so I would be looking for price to move up from hereas we can see price moves up tries to go higher in here but as we talked aboutour resistance right there price closes below that so it is bullish but now wehave a big pin on top so with this one as wellthe pin on top creates a little bit bit of neutral bias in this one so the biaswould be bullish to neutral again this one and this after this day I would nottrade this candle I would go to a different chart where we can find somesort of solid candle close so we have a better higher probability trade to workwith so for this one I would be looking I would be passing on this trade so Iwould wait for what the next day shows us so let's see what the next day showsso now we have a bullish candle close it's above the previous supportresistance level here so the bias turns bullish this is a good trade to getengaged in so I would be looking for price to move higher based on this kindof close and price does go higher so when we are trading under live marketconditions so it's not how that candle closes for that day what we are lookingfor it where we were did the price go up from there because our market Directionwas up so price went up it went to the next support and resistance or close tothe neck support or resistance area right into this one and then a drop fromhere so now we have a bearish candle close we have a solid candle close herewe have a pin so that candle looks good so the bias is to the downside so nextday I would be looking for price to drop and price dropped a bit right into ournext support or resistance area but could not break through this one here sowhen we are trading under live conditions we would have to payattention to these support and resistance areas and once we see thatprice is forming either some sort of a double top or is getting stuck at thatprice at that this is when we would remove the tray sohere what we have is price is just starting to go sideways now we do have abullish candle close so I'm looking for price to go higher so my guess will beup and a price moves up so that's a good solid candle close but we are intoresistance so this is where price had churned see how price this candle hadclosed right into that resistance level and then it moved higher before pricedropped here so with this one here as well I would be looking for price tomove higher but this may not be a candle that I would I would be very carefultrading this one because really all we're looking for is price to go to thatlevel and it would have to break through this resistance level and as you can seethis is the problem that happens when we are into this resistance area and that'swhy I was saying this may not necessarily necessarily be the candlethat I'd be trading because there is a big wall of resistance there okay so nowwe have next day we have a big drop and after this once we have such a big droplike this one we can get pullbacks in price so with this one the bias is nowto the downside but we could get a pullback like this one because that's ahuge drop so we went from 150 for 75 to 150 to 58 so a couple hundred pips thereso let's I would look for a pullback and then my bias is to the downside fromhere on so we had a small pullback not a big one here small pullback at themarket by or the bias still is to the downside here so now we are into supportthe candle is getting smaller so we could be losing some momentum so I wouldlook for price to come back into this level once again so my bias is still tothe downside so let's see so here we go price came into this level here see howit bounced off of this level and then we have a big bullish candle close now sobias has changed a to bullish so this is what we're doing basically from day today we are guessing where price is going to go so now based on the bullish candleclose I'll be looking for price to move higher butand because this is such a big candle I would be looking for a pullback and thenlooking for entry here so as we can see price pulled back and went all the wayand then closed to the downside so because we're not painting the candleswe're going one day at a time we don't know which direction it went in andthat's the difference between when we have forward testing we'll be able tosee what direction the price is going in first and we can make a decisions basedon that and we can do that in the forex tester here as well but then we have toit takes a while to paint the candle so we won't worry about that okay so basedon this kind of close here I'm looking for price to drop as we can see pricedrop so we were right we're looking for price to drop again and as we can seeprice dropped and now we finally have a solid candle close into this supportarea here but because we are into support I would look for a bit of apullback and then looking for a drop again there we go so we had a bit of apullback there and a drop so market direction is correct and now we see thatbefore the canvases were expanding so that means there was momentum wasincreasing but now the candlesticks are gettingsmaller so we have a smaller candlestick which means our momentum is now startingto wane so we have to keep that in mind but the market direction is still to thedownside and here we go actually it dropped quite a bit so this is a nicenice thing always when I'm training I'm always thinking about where the pricewill pull back to because we can get better entry so anyways our marketdirection is correct and we are all the way back down here we have a big pin inthe bottom which means price could pull back a bit so let's see pull back a tinybit so it looks like something was going on in the market because generally pricedoesn't drop that much we went from 51 37 to 40 734 and then from 49 46 to 4520 so Quetta quite a bit of a drop here so now wehave a big big can a big pin to the downside which means price could pullback from here so let's see there we go price pulled back but then closed a downhere so when we're looking so these are the things that are tradableopportunities so for after the pin bar we were looking for price to pull up orpush up higher we were looking for price to move higher it did that and thenclosed here like this so there's no bullishness in this candle but the bigpin here means rejection so this one here I'm looking for price to dropfurther it drops but then closes up high so next day our market Direction is I'mlooking for a further move to the upside and so when we look for drops and thingslike that it's always nice to look at where the price has been previously sothese support and resistance areas are very very important because the pricewill tend to go to those areas so now we have a bullish counter close looking forprice to move higher let's see it goes higher but then drops from our nextsupport or resistance area so now we have a bearish candle closed it'slooking for price to drop so what we see here is prices in a sideways move so weare in a range bound market if we were to remove this middle support andresistance line we see the prices just going sideways so it's not really doinga whole lot so it goes to the high it drops now where it is we have a bearishcandle close I'm looking for price to go back down again so let's see price goesdown finally breaks through that range that it was kind of shuffling back andforth in so now we have a very very solid a bearish counter closed based onthat we'll be looking for price to go down again so I will look for a bit of apullback here potentially into this previous resistance and then a drop andit doesn't pull back as much but the momentum still stays to the downside sobias still is bearish but now we are running into the bottom here so we'regetting closer to our support as we can see our momentum is is waninghere because we have a small candle close so I'm still looking for a dropbut not as big a drop so let's take a look it does drop it just dropped quitea bit actually more than I would have thought but it does dropped and thenpulls back here so we have a big pin so once we have a large pin in in thedirection it generally shows that prices price could go in the other direction soI would look for price move higher from there it doesn't do that actually so weso our direction this day would not be correct it goes right into the into thetop of the candle and then drops from there so bias is still bearish now solooking for price to drop and we get a pullback so I'm still looking for priceto drop so the bias day is bearish till this candlestick is taken out in theother direction so this one is not quite engulfing yet so we still have bearishbias and as we can see price dropped right into the bottom here so now wehave four days where price tries to break this bottom and it's not able todo so so I'm looking for price to move up higher nowthere we go price moves up higher so we have a bullish counter close looking forprice to move up higher but we are into resistance so we'll have to be carefulwith this one and as I said we are into resistance a price goes right into ourprevious resistance and then drops from there so now we are going into asideways move like this again so we just mean sideways consolidation so if youtake a look here so we have a drop sided with consolidation drop the sidewaysconsolidation and from here I'm looking for price to go into the bottom of thisprevious support resistance level so into the into these levels hereso by assistance downside let's see it goes into the bottom pulls back again sonow we have doji basically we arranged bounds I'm looking for price to go uphigher doesn't do much it's still consolidating sideways so now either weneed to see a counter close outside to the upside here for our price to reversehere or we need to see a counter close below this rainchange so that price we're looking for price to move lower than so let's seewhat happens which direction right now this candle is very very neutral and Iwould not trade that candle so I would just wait I would go to a differentcharge and find a better candle to take a trade on so let's take a look so nowwe have a bullish candle close we are outside of that range with that pricewas trading in for the last several days so now we are bullish my bias wouldshift to bullish and is not able to go higher so this is a day that we arewrong in so here this is not a completely engulfing candle still soagain I would wait to see where the price goes but the way the candle hasclosed we're still keeping in this overall bearish bias so this could dropagain and it doesn't doesn't do much just pulls back so this is not a candleI would trade we wait to see the real direction here okay so now we have ahigher high price wasn't able to break below this the support here good solidcandid close this is a bullish engulfing candle so looking for price to move uphigher again but we are into resistance so that's something to be mindful ofwhoa that was quite a move to the upside so big bullish move here and then pricecloses as a doji so something's definitely going on in the marketbecause we are this is back from 2000 and this is that from 2010 so well weknow what was going on in the markets back then there was a lot of havoc inthe markets okay so we had a big bullish move here price rejected that so now Iwill not trade this candle because price opened and closed at the same time andthere's too much volatility in this one so this is the time I would skip thisand look for a different chart to take a trade from see if you can find a betterone so let's I'll just wait for the next day so we have a dropnow prices closed below this previous support resistance herenow the buy shifts to the downside and we get a drop that's a good solid kindof close I'm looking for price to move down further so biases to the downsideand we get a drop but then price pulls back from this previous support andresistance area here so as we can see the daily market analysis is justbasically we're looking at each daily candle and based on that based on thesupport of resistance based on the way the counter closes we're making adecision on where the price will go next so with this plan we do have a pullbackbut overall bias is still to the downside price is held below this so I'mstill looking for price to drop and as we can see price comes into thisresistance layer area then drops and now we have a pen here surprise is justgoing sideways so this one the bias is to the downside but this may not be thebest candle to trade because we are in a very very tight range now for the twodays here but the bias is still to the downside so so it does go down rightinto the bottom and now we have a candle close in to outside of this little tinyrange that we were in so the bias will shift to up to the upside now so biasesbullish and here we go price closes up so this is a good solid candle closeprice closes right into the top of the day so bias is still bullish but now weare into resistance so we do need to see a price go on the other side of thisresistance and hold here so I would look for price move up and then do a backtest of this level and hold above and this will be a place to take an end tolong and let's see this is why because if the price is not able to hold aboveit can do this fake out and drop so this is why when we when it comes to entrieswhen we start doing the entries and we'll do that next week so this onewe're just kind of playing around just guessing market direction that's it thename of the game is a guessing game we're just guessing the market directionokay so now we have a bearish engulfing hand or clothes so looking for price todrops biases downside and it doesn't do that so we are pushing higher now it's akind of slope but is this like it's pushing higher so this is a bullish kindof close so second time around we are closing bullish into this resistance sochances are it it will it may go through here so just like this one so we closedbullish and then price pullback and then pushed into the same resistance levelonce again so let's see if we can break through this one so the direction wouldbe to the upside so bullish still here we go price closes bullish so now we arepast that resistance or looking for price to move higher again and price isgetting stuck at the next support and resistance level right into here so herewe have our support resistance level and now we have a bearish candle close sonow we're looking for price to drop let's see it doesn't do that it just itdrops a bit but then it turns around completely so overall we are starting toform this this little a trendline to the upside here so bullish trend line hereand but it's prices just struggling with the support resistance level here itdoes go higher but then closes below so my guess will be that price would comeand test this trendline again and it does that closes below it does go abovebecause there's still bullishness here now we have a bearish candle close westill haven't broken really closed above this support resistance area in a numberof days so now the bias shifts more to the downside okay so let's see if pricewill drop so the bias here is bearish and it drops but then it's still gettingstuck here so really we're just going sideways in this right nowso all these days price is just going sideways not really nothing muchhappening so may not be the best one to trade under like market conditionsbecause we need to wait to really see it market direction so this is when youmove to a different chart that's why we domultiple chart analysis because we are looking for that good candlestickformation and that will give us actually you know our market direction will becorrect and we will be able to get some pips from the trade so with this oneit's just pulling sideways let's see okay finally we have a bullish candleclose so that's a good Mary BOSU looking candle and looking for price to move uphigher there so the bias is bullish it goes up a little bit pulls back so thebias is still bullish because now we have and still an upward bias so itcould pull back all the way into this support area so I would wait to see ifwe're gonna pull back further and this is where you go to a smaller time frameand you wait for the trade to show itself so basically what I'm looking foris price to come into the support area and then bounce off of that and it doesjust that it comes into the support area and then bounces off of that so overallour bias was bullish but we were looking for a pullback into this previoussupport resistance area so that's a nice bullish kind of close I would look for aprice to move higher and it does now the candle is becoming smaller we aregetting into the next support and resistance area right over here so wehave to be careful with this one because price could change direction so let'ssee where the bias is still up but may not be the best one to trade againbecause we are right into resistance let's see if it can cross it it doesn'tso this is why we have to be careful with it because we were into resistancethere so now we have a bearish calendar close of be looking for price to dropand it does so this is our daily chart analysis so basically every day you lookat how the camera closes for that particular chart for that particularpair and based on that you're guessing which direction the markets gonna go inokay so with this one price drops looking for price to drop further kindof come back into this 14850 area it makes it almost makes it there so andthen it pushes up from there so now we have a bullish engulfing counter closeit closes above the previous resistance area and so the bias now is to theupside so there we go it moves up slightly and that's a very small candleclose so but it still stays bullish the momentum is waning those we would haveto be careful so again you want to go to a different chart and trade that basedto let's see price drops so this is why because the momentum was it was losingmomentum so now we have a bearish counter close so looking for price todrop and it drops a little bit so now we're starting to see the price goessideways so we have bullishness and a pin on the top so we have bullish toneutral buyers here and it's staying sideways so this one again bullish toneutral we have pins on both sides but we still have bullishness there now it'scompletely going sideways so this is definitely not the pair to trade becausenow we have this narrower range the price is going in so again here justlike we had talked about in the bottom here we need to see price break intoeither side either we need to see a close above outside of this rangetowards the towards up side here for it to continue further or we need to see aclose below the range for it to continue downward so right now it's just bouncingaround so this is probably not the best day to trade this chart so we'll waitfor the counter close so now we have a bearish candle closer looking for priceto drop and it drops further so now we are into the next support and resistancearea right into here so we have multiple pins there so still looking device isstill to the downside here but it doesn't break the low so it does dropdoesn't break the low we are back into the bullishness but we are back into ourresistance as well so biases bullish closes above the resistance so stillbullish there we go and now we are into thenext support and resistance area all the way up so I would expect it to run intotrouble bear so let's take look it runs into trouble there all right so I thinkwe will wrap it up here so this was just a I'm just kind of quick and dirty aguessing game and we'll play some more of this tomorrow as well so I won'tstart doing the full retesting tomorrow we'll start it on Mondays so that way wehave a whole week's worth of data that we can look at and we'll continue thesesessions this is a good practice so just playing this guessing game gives you alot of practice so if you're like for example think of yourself as abasketball player all you're doing is just shooting you're just you know doingsome throws shooting the ball and you don't really you're not you're notpracticing any anything in particular you're just trying to doing your freethrows just trying to get the ball in the basket that's the only purpose hereand then when we actually refine the strategy once we get good at picking upmarket direction then the second step would be to refine our entries and exitsso for now we will just do our player guessing games we'll do that tomorrow aswell and next week onwards we'll start doing it we'll start doing our forwardtesting as well but we'll continue with the game so we'll do a few of thesepairs so it's very very important doesn't matter whether we are athletesor we are traders we need to sharpen our skills so justlike athletes spend most of their time sharpening their skills they're justshooting the basket just just doing their throws they're not really they'renot playing in tournaments whereas um we as traders spend more time executing andless time practicing completely the opposite whereas for everything elsemost people will spend more time practicing not implementing so this isour practice so we'll continue on with this one there's no real rush to getanywhere in a hurry the more we practice this the better we'll get at pickingwhere the market direction because if you can get the marketDirection correct half of your that that's half the challenge right justgetting the market Direction correct and then you're halfway there so keep thatin mind so we'll call it a wrap here you guys have a wonderful day and and youknow we'll practice this more so Gregory no worries you know it this is a goodgame so good good practice and just guessing and that's how we're doing soyeah keep try that on your live charts look at the new you're closed for todayand just just do some projections where do you think the markets gonna go nextso we do that setups game that's another game that wejust basically look backwards to see what setups were present on the chart sothis is projections is basically the other aspect of the same game that Iasked my trade remembers you to post charts on to project where it's gonna goand the idea is not you know how right we are but the more we practice a thebetter our eyes will will get trained or our eyes will adjust to seeing marketDirection better so this is the same thing here the more we do it the betterwe'll get and more pieces of data our mind will start picking on and you knowwe'll always be either there will be times when we're wrong so that's okayit's just it's just a guessing game but the more we do it the better we'll getat it all right so you guys have a wonderful evening and I will see youagain tomorrow at the same time for our next session and we will continue onwith the same pound/dollar chart here we are into July already so as you can seethis goes by quite quickly and I will see you all tomorrow bye for now have agreat evening.

Source: Youtube

Back-Testing Jam Session: Forward-Testing and Back-Testing - Forex Trading Strategy

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