Trading What I see !?

[Realrocknrolla]

How many successful strategies have you developed using 'back testing' ?

Plenty if the rules above apply.

Define a time frame on back testing.

Backtesting allows you to simulate a trading strategy using historical data to generate results and analyse risk and profitability before risking any of your balance. I would recommend paper trading if you find anything that has legs and bin something that doesn’t. Also you have to be honest with yourself going forward otherwise a strategy you are running won’t be true.

As Peter said in his video, he has tweaked and branched off many times. Probably like a lot of us.

I have a Devil Bot. I called it that because it is version 6.66.

I would recommend 'forward testing' combined with analysis as Peter advises.

I would recommend back testing on certain strategies. Backtesting is one of the most important aspects of developing a trading system.

If created and interpreted properly, it can help you optimise and improve your strategy, find any technical or theoretical flaws, as well as gain confidence in your strategy before applying it to the live markets.

And again you will be able to manage your risk etc.

Just my opinion. You and Peter have yours.

Good Luck

PS - In one of your earlier post you said that no one would be profitable from backing straight or laying straight… this isn’t the case for me. I have profitable backing and laying strategies.

[Cardano]

Plenty if the rules above apply.

Define a time frame on back testing.

Backtesting allows you to simulate a trading strategy using historical data to generate results and analyse risk and profitability before risking any of your balance. I would recommend paper trading if you find anything that has legs and bin something that doesn’t. Also you have to be honest with yourself going forward otherwise a strategy you are running won’t be true.

As Peter said in his video, he has tweaked and branched off many times. Probably like a lot of us.

I have a Devil Bot. I called it that because it is version 6.66.

I would recommend 'forward testing' combined with analysis as Peter advises.

I would recommend back testing on certain strategies. Backtesting is one of the most important aspects of developing a trading system.

If created and interpreted properly, it can help you optimise and improve your strategy, find any technical or theoretical flaws, as well as gain confidence in your strategy before applying it to the live markets.

And again you will be able to manage your risk etc.

Just my opinion. You and Peter have yours.

Good Luck

PS - In one of your earlier post you said that no one would be profitable from backing straight or laying straight… this isn’t the case for me. I have profitable backing and laying strategies.

Just to clarify the above comment you need to 'offset; your 'back bets' with a 'lay bet' and vice-versa

[goat68]

I would recommend 'forward testing' combined with analysis as Peter advises.

I would recommend back testing on certain strategies. Backtesting is one of the most important aspects of developing a trading system.

If created and interpreted properly, it can help you optimise and improve your strategy, find any technical or theoretical flaws, as well as gain confidence in your strategy before applying it to the live markets.

And again you will be able to manage your risk etc.

Just my opinion. You and Peter have yours.

Good Luck

PS - In one of your earlier post you said that no one would be profitable from backing straight or laying straight… this isn’t the case for me. I have profitable backing and laying strategies.

Just to clarify the above comment you need to 'offset; your 'back bets' with a 'lay bet' and vice-versa

yep

[Realrocknrolla]

I would recommend 'forward testing' combined with analysis as Peter advises.

I would recommend back testing on certain strategies. Backtesting is one of the most important aspects of developing a trading system.

If created and interpreted properly, it can help you optimise and improve your strategy, find any technical or theoretical flaws, as well as gain confidence in your strategy before applying it to the live markets.

And again you will be able to manage your risk etc.

Just my opinion. You and Peter have yours.

Good Luck

PS - In one of your earlier post you said that no one would be profitable from backing straight or laying straight… this isn’t the case for me. I have profitable backing and laying strategies.

Just to clarify the above comment you need to 'offset; your 'back bets' with a 'lay bet' and vice-versa

Sorry I don’t understand what you mean?

[Cardano]

I would recommend back testing on certain strategies. Backtesting is one of the most important aspects of developing a trading system.

If created and interpreted properly, it can help you optimise and improve your strategy, find any technical or theoretical flaws, as well as gain confidence in your strategy before applying it to the live markets.

And again you will be able to manage your risk etc.

Just my opinion. You and Peter have yours.

Good Luck

PS - In one of your earlier post you said that no one would be profitable from backing straight or laying straight… this isn’t the case for me. I have profitable backing and laying strategies.

Just to clarify the above comment you need to 'offset; your 'back bets' with a 'lay bet' and vice-versa

Sorry I don’t understand what you mean?

What don't you understand !!
I've clarified what I mean with the two attachments

[goat68]

I would recommend 'forward testing' combined with analysis as Peter advises.

I would recommend back testing on certain strategies. Backtesting is one of the most important aspects of developing a trading system.

If created and interpreted properly, it can help you optimise and improve your strategy, find any technical or theoretical flaws, as well as gain confidence in your strategy before applying it to the live markets.

And again you will be able to manage your risk etc.

Just my opinion. You and Peter have yours.

Good Luck

PS - In one of your earlier post you said that no one would be profitable from backing straight or laying straight… this isn’t the case for me. I have profitable backing and laying strategies.

Just to clarify the above comment you need to 'offset; your 'back bets' with a 'lay bet' and vice-versa

You're clarifying your comment, not the above I presume?

[goat68]

Just to clarify the above comment you need to 'offset; your 'back bets' with a 'lay bet' and vice-versa

Sorry I don’t understand what you mean?

What don't you understand !!
I've clarified what I mean with the two attachments

You're hedging, Realrocknrolla is straight back/laying

[Cardano]

Sorry I don’t understand what you mean?

What don't you understand !!
I've clarified what I mean with the two attachments

You're hedging, Realrocknrolla is straight back/laying

Yes to both of your previous comments Goat
Straight backing/laying is gambling. Best of luck with that

[goat68]

What don't you understand !!
I've clarified what I mean with the two attachments

You're hedging, Realrocknrolla is straight back/laying

Yes to both of your previous comments Goat
Straight backing/laying is gambling. Best of luck with that

I think we're all gambling!

[Cardano]

You're hedging, Realrocknrolla is straight back/laying

Yes to both of your previous comments Goat
Straight backing/laying is gambling. Best of luck with that

I think we're all gambling!

Life is one big gamble

[Trader Pat]

Straight backing or laying is only gambling if you don't know what you're doing. There are plenty of people who reduce their commission by straight backing and laying.

Just like back testing is only pointless if you don't know what you're looking for. If you spot something when trading live you can then back test the data you've collected to see if it repeats. However collecting data and then looking for patterns in it is probably not so worthwhile.

[Cardano]

Straight backing or laying is only gambling if you don't know what you're doing. There are plenty of people who reduce their commission by straight backing and laying.

Just like back testing is only pointless if you don't know what you're looking for. If you spot something when trading live you can then back test the data you've collected to see if it repeats. However collecting data and then looking for patterns in it is probably not so worthwhile.

"There are plenty of people who reduce their commission by straight backing and laying."
Can you explain that comment a bit more

[andy28]

Back testing is useful for a newbie if done properly. But it needs to be done with forward testing and then when you go live use a staking plan, starting off with small stakes and let it prove itself in growing the bank before increasing stakes.

The other reason for doing it this way especially for newbies like me is it gives you confidence as you know that over 10000+ events it has shown promise and also it will show there are highs and lows in that sample proving there is no need to worry if things go against you for a week or two, you will be prepared for it as it will happen at some point. I think this is why many newbies give up because as Murphy's law would have it the minute you go live you hit a bad run, so how do you know if it is just a poor run or a failed strategy if you have nothing to look back on? So they quit

Also if you have a lot of historical data and the data over the years is showing the same yield and is doing so when you go live then would that not indicate an edge and also prove than no one else has it? I mean if they did over time would that edge regress back to zero as more people see it?

The pro's on this site can probably assess a strategy very quickly (experience) and know if it is a worthwhile project but for newbies that is a skill we haven't developed yet so need confirmation and for me that is from historical data while I gain that experience.

That's just my 2 cents worth

[Tetras]

I just kept digging and digging for patterns, and I found lots of historical patterns in the random data!

I'm afraid this is where a lack of methodology is letting you down. Backtesting isn't where you look for edges/patterns. Backtesting is confirmation of your analysis. The analysis is designed around your theory or idea. And your idea comes from observation or other inspiration. Each discrete step asks specific questions and involves the minimum amount of work to answer that question. And you only proceed to the next stage if the answer was satisfactory. Any wonder I'm suprise you're only doing paper testing which is actually just the final shakedown. Everything before that has been consigned to the bin.

You might say that's slow and long winded but the tortoise will always beat the hare and I'm afraid you're proving that. Tbh it's nothing special, it's just a fairly standard problem solving methodology. The above won't suit people without the necessary tech or be necessary if they're implementing something they do manually but that's your situation.

We keep mentioning backtesting and re being hasty, you did some for about 6 months and didn't get much added value from it. That's because you just started running tests. If you'd spent 3 months(!) just thinking about what it could tell you, all the possible pitfalls and a solution for each, checks and recs, limitations, tools you'll need etc and learning how to test....and then tested, then it wouldn't have been such a waste of time and you'd have a reusable skill.

I know it always sounds like a bollocking goaty and I'm sorry about that because for you this is just a bit of fun, but I really wish you'd stop doing and start thinking.

I agree with part of this, but you're missing my objective. I agree with "your idea comes from observation or other inspiration", and this is what i'm trying to do, work out how to develop a model and how to use it. Peter's re-posted video https://www.youtube.com/watch?v=DZEiNaXVWSw is what I am trying to do, and as he states he's dubious on backtesting and rather prefers to dabble in the live market. Paper testing lets me do that with reasonable accuracy without losing money!

In that video, my take on the context is that Peter is really breaking down and explaining how he did/does it, to address how people assume it's super complicated, or try to trade without any structure. Sooo, I think you have to take his comment from within that context. What you're trying to do is more a form of hard-automation / modelling type thing and I'm not sure it's applicable in the same way. I don't have the experience to give you advice in that endeavour, but there are traders on here that do...

[ShaunWhite]

and as he states he's dubious on backtesting and rather prefers to dabble in the live market.

Well he's hardly likely to suggest things you can't do with BA is he? And "dabbles in the live market" works for him because he's been doing it for over 20yrs.

Ultimately it doesn't matter what you do if it's making money.