Best Forex System

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Beware of system backtesting!

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Best Forex System

  1. 1. Best Forex System : Beware of Backtesting!
  2. 2. What is Backtesting? <ul><li>Backtesting is essentially the testing of a trading system using historical market prices, to see how profitable that system can be. </li></ul><ul><li>Backtesting is usually done with computer software that runs the trading system through a period of time in the past. </li></ul>
  3. 3. Why Beware of Backtesting? <ul><li>Many new traders think that good backtesting results (from a trading system) will guarantee similar results in the future. </li></ul><ul><li>But because everyone knows what has happened in the past, it’s easy for anyone to create a profitable trading system based on historical prices. </li></ul>
  4. 4. But Remember: <ul><li>We’re not trading in the past; we’re trading in expectation of the future. </li></ul><ul><li>Trading systems based on backtesting (i.e. hypothetical) results that would have worked in the past, may very well fail miserably in the future. </li></ul>
  5. 5. So don’t fall into their trap: <ul><li>There are unscrupulous advertisers that sell Forex trading systems based on “excellent” backtesting results. They use hypothetical results as a sales tool. </li></ul><ul><li>Unfortunately, many traders purchase these trading systems only to lose thousands of dollars after using them. </li></ul>
  6. 6. How you can protect yourself <ul><li>When looking for a trading system, ask the system developer whether the advertised trading results are actual or hypothetical . </li></ul><ul><li>Be wary of people who use hypothetical returns to try and sell you something! </li></ul>
  7. 7. Find out more <ul><li>Did this short presentation help you? </li></ul><ul><li>Get more free tips and information at: </li></ul><ul><li>Forex System Traps </li></ul>

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