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ForexGuy · #1 12-08-2009, 06:49

Traders I wanted to provide a word of caution. While there are many great systems out there (some free like on this site) it does not absolve you of doing the hard work to ensure the profitablity of that system.

You must still do the backtesting, forward testing and expectancy calcualation before applying any new trading system. While many of you will say, "Of course, what does he think I am, an idiot?" Ask yourself are you really doing it?

I've attached a spreadsheet of a trading model I have been using for a while now. I hesitate to post it because it is not a "free system". But I want you to see the work that goes into testing a system.

This was actually a very easy system to test because it takes only a small number of trades per month. But as you can see is still very effective.

Remember traders, "what we attain to cheaply we asteem to lightly" - Thomas Paine.

Being a trader is hard work. Don't short change yourself by bouncing from system to system. TEST, TEST, TEST!

Here is the spreadsheet attached:

AshFX · #2 12-08-2009, 09:04

Quote:

Originally Posted by ForexGuy

Traders I wanted to provide a word of caution. While there are many great systems out there (some free like on this site) it does not absolve you of doing the hard work to ensure the profitablity of that system.

You must still do the backtesting, forward testing and expectancy calcualation before applying any new trading system. While many of you will say, "Of course, what does he think I am, an idiot?" Ask yourself are you really doing it?

I've attached a spreadsheet of a trading model I have been using for a while now. I hesitate to post it because it is not a "free system". But I want you to see the work that goes into testing a system.

This was actually a very easy system to test because it takes only a small number of trades per month. But as you can see is still very effective.

Remember traders, "what we attain to cheaply we asteem to lightly" - Thomas Paine.

Being a trader is hard work. Don't short change yourself by bouncing from system to system. TEST, TEST, TEST!

Here is the spreadsheet attached:

Couldn't have said it better myself.

hradar · #3 14-08-2009, 10:03

Which version of Microsoft Office is this file??

austin · #4 14-08-2009, 10:36

Also, remember that it's pretty trivial to come up with a system that is profitable on a back test, and that the system can conform to whatever max draw down / sharpe / etc / parameters you so desire.

It's even relatively easy to come up with a system that is profitable on a forward basis as well.

The real trick isn't creating the right system, but rather it is using the right system.

harith · #5 14-08-2009, 10:50

how does this xle work ????
does it work at platform >> or >> how i can make it work ???
thank you

Stroopster · #6 15-08-2009, 04:34

Hi Forex Guy
could you explain the header line on the spreadsheet...most of it is simple but things like ATR I am not sure of. Certainly looks good.

ForexGuy · #7 15-08-2009, 09:59

Quote:

Originally Posted by austin

The real trick isn't creating the right system, but rather it is using the right system.

I don't even understand what that means. Doing the backtesting and forward testing ensures two very important things.

1. The system (under whatever parameters) is profitable if followed. The sample size must be large enough to cover a variety of different market conditions, and the rules of the system must be clearly stated.

2. Serves in building confidence in the model or system. By doing the testing of the model you will gain confidence in its performance and will increase your odds of following the rules as you laid them out.

To suggest there is no value in backtesting shows a great lack of trading maturity.

ForexGuy · #8 15-08-2009, 10:01

Quote:

Originally Posted by Stroopster

Hi Forex Guy
could you explain the header line on the spreadsheet...most of it is simple but things like ATR I am not sure of. Certainly looks good.

ATR Stands for Average True Range - The range from high to low a pair will travel over a given period of time.

AshFX · #9 19-08-2009, 10:17

Quote:

Originally Posted by hradar

Which version of Microsoft Office is this file??

XP I think.

ForexGuy · #10 19-08-2009, 11:07

It's a 2007 Excel file.

herry_fxhope · #11 26-08-2009, 03:35

it's pretty trivial to come up with a system that is profitable on a back test, and that the system can conform to whatever max draw down / sharpe / etc / parameters you so desire.
It's even relatively easy to come up with a system that is profitable on a forward basis as well.
The real trick isn't creating the right system, but rather it is using the right system. Thank you

ForexGuy · #12 13-09-2009, 15:04

Quote:

Originally Posted by herry_fxhope

it's pretty trivial to come up with a system that is profitable on a back test, and that the system can conform to whatever max draw down / sharpe / etc / parameters you so desire.
It's even relatively easy to come up with a system that is profitable on a forward basis as well.
The real trick isn't creating the right system, but rather it is using the right system. Thank you

I'll say again what I said the first time you posted this:

To suggest there is no value in backtesting shows a great lack of trading maturity.

TC East · #13 14-09-2009, 00:41

Quote:

Originally Posted by ForexGuy

ATR Stands for Average True Range - The range from high to low a pair will travel over a given period of time.

Is there a standard number of periods to use for ATR? I've seen 14 and 20 used by others, but wondering if there is some base number of periods or if it differs for different time frames...thx

hlass · #14 14-09-2009, 01:22

Quote:

Originally Posted by ForexGuy

I'll say again what I said the first time you posted this:

To suggest there is no value in backtesting shows a great lack of trading maturity.

I will second this, I am a pretty damn good trader, and no matter how I have traded in the past, I have always backtested how the system worked and also backtested what I have traded, there is no substitute to see what ones system did and the possibilities that lie within that system going forward
hlass

uzo10 · #15 14-09-2009, 16:25

Thanks for the great advice. Keep it up!

ForexGuy · #16 27-09-2009, 02:52

Quote:

Originally Posted by TC East

Is there a standard number of periods to use for ATR? I've seen 14 and 20 used by others, but wondering if there is some base number of periods or if it differs for different time frames...thx

No, there really isn't. It depends largely on how you choose to use it. Sorry I can't be more specific. It's just really preference.

Juda2oo9 · #17 07-10-2009, 23:20

Couldn't have said it better.....
now i need to make sure i do my research.....
should we stick to this forum only, or use several?

ForexGuy · #18 08-10-2009, 00:41

Use any resource that gives you an edge. I would highly recommend you read my post "The facts about Online forums" located in the "Market Insights" section of this forum.

studyolic · #19 12-10-2009, 22:10

ForexGuy,
very valuable advice. Thanks.

uzo10 · #20 13-10-2009, 00:53

hi forex guy,

please can you resend the trading method you posted in another excel format, like excel 2003. I dont have the 2007 version of excel.

ForexGuy · #21 13-10-2009, 00:57

No, and uzo10 I am not upset with you for asking, but let me just clear this up right now before things get out of hand.

Forums are typically a place for Users and Complainers. I do not have time for either. I am attempting to supply quality FREE content that traders can use to grow and prosper. What FREE content I choose to supply I do at my discretion and at my leisure.

Now, while it is my goal to supply the highest quality FREE content I can based on my years of experience both as a trader and educator. It is YOUR responsibility to do what is required for YOU to access and apply that FREE information.

http://www.bestbuy.com/site/olspage....=1158320998618

kingmaker · #22 13-10-2009, 02:04

Thanks a lot

jnevins · #23 13-10-2009, 02:44

Quote:

Originally Posted by studyolic

ForexGuy,
very valuable advice. Thanks.

Here's the deal... to be good at anything... that is good enough for you to get paid money... in anything, piano playing, baseball playing, painting, etc... takes a minimum of 10,000 hours of disciplined work... Forex is no different... it might be even harder and take longer.

fxman · #24 13-10-2009, 08:35

Quote:

Originally Posted by ForexGuy

It's a 2007 Excel file.

super super super

usbajonas · #25 18-10-2009, 17:32

Hi-Would you comment on how leading and lagging indicaters might play a part in determining your trade ideas. Thanks

ForexGuy · #26 18-10-2009, 18:52

Hi Usbajonas,

The only indicator use is a 7 period RSI. I use it to verify over bought/sold conditions.

I also use ATR to determine current market volatility.

That's about as specific I can be considering the general nature of your question.

Jim67 · #27 21-10-2009, 11:40

I have only just joined this forum but it looks like one of the best I've seen.
After 3 years of trading different markets and systems I have come to the conclusion that 1. You gotta kept it simple and 2. You gotta prove the system to yourself.
I have been using my own system for some months now and aam embarrassed to say that it is remarkably similar to Ash's systems. Same but different.
Looking forward to the journey ahead in this forum. :)

Egwig · #28 03-11-2009, 18:34

I have been searching and trying to find an indicator for MT4 that will report the average spread for a given pair over a set period of time, or even just the range of the spread.

I have located a couple but they are pretty useless.

I think the problem lies in the difficulty of programming an indie that can sum and average every tick.

Does any one know of such a mythical beastie?:confused:

Egwig:cool::cool:

sirajrasul · #29 20-01-2010, 19:08

This thread is very informative... Thank u guys...

tripranav · #30 22-02-2010, 01:46

thank you for the info

balajisi · #31 22-02-2010, 01:51

Guys

Keep the info flowing so that newbies can learn

Quote:

Originally Posted by tripranav

thank you for the info

vani · #32 03-06-2010, 06:48

Quote:

Originally Posted by austin

Also, remember that it's pretty trivial to come up with a system that is profitable on a back test, and that the system can conform to whatever max draw down / sharpe / etc / parameters you so desire.

It's even relatively easy to come up with a system that is profitable on a forward basis as well.

The real trick isn't creating the right system, but rather it is using the right system.

Well speaking of the right system, I guess I will suggest finding a site that will train you in their strategies for free. Makemoneycurrencytrading dot co dot uk is good as they run a live portfolio so you can actually see if their strategies are making profit live.And they send out a daily report each day with the trades.

adria · #33 12-06-2010, 12:24

Hi there,

Well, i am unaware of the site you are talking about in the above post. But i find FXstreet updates and signals quite accurate. Though, i use action forex for fundamental news and analysis.

michaelspar · #34 16-06-2010, 03:57

"Keep the info flowing so that newbies can learn."

Yes guys, keep the info flowing, because the thread is very informative, it will help a lot of newbies

shirley · #35 25-07-2010, 09:28

Quote:

Originally Posted by hradar

Which version of Microsoft Office is this file??

Its a normal .xls file and could be easily accessible by the MS Office 2003 version.

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