How to select and prove a strategy is viable for trading
FeaturedHere is a quick guide for assessing a system and the bar types - in backtest and in realtime
Preparation:
A. Select a strategy to test: Establish a base setting for stop, breakeven, trail and targets
B. Procure 2000+ days of data from somewhere like http://www.tickdata.com
TEST
1st step - Backtest and Optimise - identify your favourite settings on a backtest from sept 2015 backwards by 2000 days
>>>Must suit your capital, drawdown, risk appetite,...ans style.. high win ratio or low win ratio versus risk reward for example...
2nd step: Run the setting on a chart to visualize the setting and backtest - doe sit make sense
3rd Step - Run the strategy on out of sample data - 2 weeks ago back 120 days
4th Step - Run the strategy on recent data 30 to 120 days - and run in realtime... watch it carefully to see if the Dataseries and strategy can in fact work in a similar way to how it is represented in the backtest/historical visualisation
if you are happy it looks similar - Watch the trading for 2weeks to 4 weeks atleast....
3 months or more is a good length of time to watch a strategy in realtime sim test and track it until you have enough experience and belief to consider it viable... Personally i have watched some strategies over years before live trading them...and i have found ways to trade them when they operate best... No system can work in all markets and conditions - so diversify or chose when to use it... according to your research on when it works best...
Trends/ Ranges/Time of day/day of week/week of month/ volume/ news days etc
You can use these tools to help track and decide which strategy and setting is working for you:
http://downloads.microtrends.co/tools/
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MicroTrends NinjaTrader Framework - 100% Free for NT Demo & Sim Trading
https://downloads.microtrends.co/#MTNTF7
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MicroTrends Double Shot Strategy Foundation - 100% Free for NT Demo & Sim Trading
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