What is a Good Backtesting Result?

“Well, good Back A, the good results of the bacteristing are when you return 1,000,000 %.”

This is what many new traders think and that’s why more than 90 % of traders fail.

If you want to be a successful businessman, you have to learn how to properly evaluate the trading strategy and adjust your impression of what is good back.

Spilller Alert: The most successful trading strategies begin as minor or even poor.

But through permanent testing and repetition, they are I made Profit strategy.

Just as successful traders are created, they are not born… successful strategies require time and effort investment.

Where to start

The first thing to understand about bactering is that almost all successful trading strategies did not start like this.

A great trading strategy is like a great invention.

It starts with an idea and the inventor wants to solve a problem.

Traders want to solve the problem of permanent making money in the markets.

To make it profitable, you have to improve your idea of your business strategy.

Once you realize that the trading strategy is rarely starting as a profitable, it is understood that brake baking or slightly profitable results can be a good thing.

If a strategy is brake (or close to it), then you may have to do something to make it profitable.

Many times, experiencing money management or exit can make the strategy profitable.

Keeping this in mind, these are more details about what you find in the results of your testing.

Historical figures that are used in back status

Before I am involved in analyzing the results of your original bactering, an important thing to consider is how much historical data was used in your back.

Many bactering platforms give you only 1 or 2 years of backstating data.

It is not enough to find out how the strategy will carry out the various market conditions and cycles.

So when you are baking, get more historical data.

Specify the period of review

Once you have a lot of historical figures, make sure your strategy explain the duration of your review.

If you are making strategies on the Daily Chart, you want to review the return on an annual basis.

Now if you are examining on a 1 -hour chart, you should probably review your monthly results.

Then detect your average return according to a period of time of your review.

You may not be profitable in every review period, but you want to see what kind of defects you have to bear and what will expect from a trade strategy.

This analysis will allow you to compare trading strategies in an objective way and decide what strategies you want to adopt and to leave.

Fix a goal

Now is the time to find out what makes the difference You.

A “good” trading strategy will be good for you and no one else.

It is not necessary to be the most profitable or consistency.

But if it meets your income needs, then that’s just that.

A word of caution here …

Many traders (including themselves) begin with unrealistic goals for their strategies.

So set a goal, but you will need to adjust what you expect A Trade strategy.

The results you are looking for may have to trade in a number of trading strategies or markets.

If you keep working, don’t discourage.

How to identify trading strategies with capacity

There are 3 basic types of bactering:

Appalling
Brake
Profitable

Now I will explain everyone and show you what to find in everyone.

A terrible bactering result

This is a clear.

If the strategy loses 80 % or more of the account, then you should not spend more time with it.

The above strategy lost 99.82 % from 2009 to 2024.

It’s just as bad as it gets.

Trying to improve the strategy with a horrible result is akin to polishing the brass on the Titanic.

It is better to advance and use your time and mental strength to create a new strategy.

Breaklin bakesting results

This is the place where things are interesting.

Most new traders will remove the brake strategy, but you are not because you are reading this article.

The brake strategy can potentially be improved and made more profitable.

It will only require two or two to work well.

Here are some questions here when trying to improve the strategy:

Can you easily eliminate the biggest losers?
Is there a shared feature of losing trade? They may be more than 2 days long or they are taken during a certain time of the day.
What happens if you set a big target of profit?
Can you do? Increase Your stop loss while risking the same percentage of your account, so don’t you stop so frequently?
Will the use of trailing stop damage improve your results?
How do your results change your results or decrease your risk per trade? This may be contradictory, but reducing your risk per trade can sometimes increase your total return.

There are great things to consider when trying to improve strategy performance.

But don’t stop there, what else can you think?

A lucrative bactering result

Now we come to the conclusion that everyone is looking for, a profitable result of the first effort.

This is not often, but it is possible.

I only got a very profitable result on the first attempt… twice.

But even if your results were profitable, you can’t stop there.

You need to double your results.

If you do not calculate everything, the results of World Trading Back Stating may vary dramatically.

Consider the following:

Did you correct commissions, spread, slippery and fees correctly?
Will you be awake to trade when you setup?
Did you follow the trading project?
Did you run Monty Carlo simulation to see your maximum potential error?

Once you confirmed that your results are good, congratulations, now you have a trading strategy.

The time has come to make sure it works.

This is a key move to make Completely It is certain that your strategy works before risking your entire business capital.

But don’t stop there.

Continue to check ways to improve your strategy.

See if you can increase the return or reduce the draw down.

Choose one that’s more important to you.

Consider trading 2 or 3 versions of your strategy at the same time to diversify your risk.

Once you are trading your strategy with your full size account, then you can repeat the process to find another profitable strategy.

The final views

Once again, you will probably not get a tremendous profitable result on your first effort.

The key is to somehow be able to make diamonds.

From there, you can work to prepare every strategy for its maximum capabilities.

It is also important to know which strategy will never work and will stop trying to improve them right now.

Remember that the trading strategy usually performs a little bad in real life.

So calculate it and don’t be too excited about a huge return.

Before leaving, I will leave you with a conversation that we had on the pod cast about this topic.