Experienced traders have an understanding how their trading method is likely to perform over a prolonged series of trades.
It's important that we understand what this is actually saying to us.
This post runs over the gains that come from examining and optimizing a trading system without taking a chance gambling with a single cent and refining their skills in the process.
There is virtually no difference between a normal trading software package and a test system. The trader sources real historical data which is added into the software testing system and they can subsequently probe and examine the system off line from the market.
The tester can commence by getting OHLC (open,high,low,close) data from their broker. The test trading environement can then be configured on the precise time period according to the trading strategy and any trading tools like moving averages etc added. The cool part now comes... years of detailed testing is now possible with minimal effort expended on the task.
If a tester was strategy testing a system that brought positions activated on weekly candles there's at least a week between expected trading chances. Quite a difference from our back testing which took no time once setup.
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