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Back Testing - Evaluating your Trading Strategy 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Back Testing - Evaluating your Trading Strategy 101 Backtesting of technical methods in light of past prices is the most popular testing strategy among technical traders.Below is a short list that will get you started; 1. How many trades does it generate? .............................................. 2. Whats the reliability of the system? ............................................... 3. How big is the average profit compared to the average loss? ............................................................................. 4. Many more.............. #Remember that you need enough data to create at least 30 trades in each test # Please let me know if you would like to know more :) Happy Trading "success occurs when opportunity meets preparation" Zig Ziglar
TVC:GOLDEducation
by SMPTrader
Intermediate Trading Strategy - Part 3In the previous post we discussed risk:reward, profit taking and trailing stop losses. If you have not read part 1 and part 2 then you are highly recommended to start there. Taking Profit Always taking partial profits, never making decisions for the full position. This is true when entering and this is true when exiting. It minimizes anxiety and emotional decision making. In Trending Markets: Stop loss is trailed once new highs/lows are established. If long then move it up to be slightly under the recent low and if short move it slightly above the most recent high. This can generally be illustrated with Bill Williams Fractals on the weekly and daily charts. Full profit can be taken on the third test of a trendline. In Parabolic Markets: I like to gamble on house money, it makes me feel much more comfortable about the draw downs. Here is an example for how to take profits in a parabolic market: If +100% then take 10%-20% off the table. If +100% again then take another 15%-25% off the table. Keep doing this as long as price is making all time highs. Take full profit if phase 4 or phase 3 of hyperwave is violated If weekly and daily RSI (with 30 setting) are > 80 then take full profit. If Welles Wilder’s ADX is > 50 on the weekly and/or > 60 on the daily then time to take full profit. For Bitcoin' watch for NVT to reach overbought zones and consider how this metric will be affected by Lightning Network and batching transactions. If Trading a Pattern: A chart pattern will indicate a profit target. If your reason for entering the trade was the chart pattern then do not get greedy with the profit target! Relying on a trailing stop will often cause a trader to miss out on a large part of the profit when trading a pattern. Be very specific about what you are investing in long term/hodling and what you are using to trade. If investing/hodling then put into cold storage and don’t do anything for a minimum of 10 years. In the final post we will delve into the best indicators and provide guidelines for when they are most effective.
Education
by Sawcruhteez
HYPERBITCOINIZATION: Shiller 10Yr Price/Earnings Ratio (S&P500)Similar to dividend yield price:earnings (P/E) looks at the profitability of stock shares. A high P/E ratio means that stocks are becoming less profitable which indicates that they are overvalued. When the market becomes overvalued it is a sign to attentive investors to stop buying and think about closing positions. The more a market heats up, the more the proportion of cautious investors gives way to reckless investors and day trading / speculation. Such a runaway process does not carry on indefinitely. it will correct. The Shiller P/E is therefore a warning to investors of an impending crash. Shiller calculates the ratio for a given year over the proceeding 10 year period (adjusted for inflation). This approach helps to dampen short-term, intra-year "noise". It allows us to visualise risk and make direct comparison with market history. Shiller calculates Price/Earnings as follows: 1) For any given date, take the yearly earnings of the S&P500 -0.24% -0.24% for the previous ten years. 2) Adjust for inflation based on Consumer Price Index 3) Take the average 4) Divide current price of S&P500 -0.24% -0.24% by the average calculated above. 5) Repeat for every year in the chart Data provided by Quandl.
MULTPL:SHILLER_PE_RATIO_MONTHEducation
by RealMcafee
Trading system ScalpingPro for Binary Options 410 USD fom 4hours trading today on the EUR-USD currency pair on the 5 m timeframe . Hi Friends ! I decided to show how my strategy works . Quite well shows the turning point of the price . This is a strategy for Binary Options . Perfect for those who are not much in a hurry and loves to trade on scalping (Strategy as simple and reliable) The strategy consists of two main scripts and one auxiliary that allows you to use the free version of T. V You can work on most currency pairs and on different T. f, but the settings are more adapted For t. f M5 Support and resistance levels are drawn and updated automatically, which is very convenient for beginners . If you strictly follow the recommendations and work within this strategy, the percentage of positive transactions is about 80 % .That allows you not to use "martingale" and stay in the black with minimal risk. But if you still like the martingale it is usually enough 3 rarely 4 steps. ( I advise you to use martingale only after two months of practice on this strategy ) Below are screenshots with more detailed recommendations . How to choose the right entry point. How to act with a false signal If you are interested in this strategy to gain access to all three of the necessary script, please contact me in private messages ! ( comments rarely looking better to write in private messages )
Education
by Andreev_Mikhail
1
When the money is on the floor - take it!In this viog I spotted a set up and did not plan to trail. So, the money is on the floor and I take it. Greed and FOMO are not the ways to go. I share how I use some indicators and price movement to assess the situation before entry. I trade what I see, not what I hear. :)) The most important things in trading: 1. See 2. Assess 3. Calculate if risk is acceptable. 4. Define entry. 5. Decide on exit. Exit strategies do not have to include a target. I know some people who have missed loads of profits because price missed a targets by about 2 - 10 pips. I call that silly. The important issue is to have exit criteria, which could be any set of situations on the chart that you define. A 'target' therefore does not have to be a fixed point. In trend-following trading for example there are no targets at all. But there are exit criteria. But nothing is perfect. If the situation changes and there is doubt about exit, just take the money!
Education
by Captain_Walker
IOTA/BTC Binance TA for beginners. EnjoyHello Traders, A follower has asked for a simple TA on this pair so I have kept this as simple as I can. The two major features of the chart are the descending triangle on price. You can see with the Blue circles, we keep putting in the same or lower highs. The Yellow circles show us that we are putting in the same lows. When we have lower highs, and the same Lows it suggests eventually we will run out of buyers at the level of the lows and price will break down. We are looking for a break down on this pair unless we see a Higher High (Price puts in a new high price, that is higher than a previous cycles High). So price means our bias is short, or to sell. MY other concern is Volume, a number of these pairs are seeing volume drop and eventually volume creates the demand to move price. When volume is down price can spike on small transactions making trading messy. To Trade this I would want to see price Advance down through the support (Black Line), and then pull back up to the black line, I can then enter short or wait for bar to move down and sell the bottom of that. I am trying to keep this simple to follow, if you have any questions please ask them and I will try and clarify them for you. Always remember if you want to make dollars your decisions need to make sense. You need to take your time with this one, wait for a clear entry or keep your money. Feel free to follow if this was helpful to assist your trading.
Education
by DollarsAndSense
6
Example of a Symmetrical Triangle on VNQVNQ formed a symmetrical triangle. It has two trend lines. One uptrend line is acting as support while the downtrend line is acting as resistance. This triangle contains three highs lower and three lows higher. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape. The symmetrical triangle can be continuation or reversal, so we must wait for which line will break. To confirm the breakout, the price should close above the resistance line or below the support line. In this case broke by support, then we must make a short. The profit target is the distance away as the back of the triangle.
AMEX:VNQEducation
by heco08
Example of a Symmetrical Triangle on ETHUSDETHUSD formed a symmetrical triangle. It has two trend lines. One uptrend line is acting as support while the downtrend line is acting as resistance. Contains three highs lower and two lows higher. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape. The symmetrical triangle can be continuation or reversal, so we must wait for which line will break. To confirm the breakout, the price should close above the resistance line or below the support line. In this case broke by resistance, then we must make a long. The profit target is the distance away as the back of the triangle.
BITSTAMP:ETHUSDEducation
by heco08
Example of an Ascending TriangleGBPAUD formed an ascending triangle. We could see a horizontal upper line (that would be a resistance) and a lower uptrend line (that would be a support). Prices moves with equal highs, and lows higher than previous. Then after a few attempts, the prices finally break through resistance. The ascending triangle is a continuation pattern. Prices come from an uptrend then prices bounce inside the triangle before breaking higher. To confirm the breakout, the price should close above the resistance line, if so, make a long. The profit target is the distance away as the back of the triangle.
Education
by heco08
Pips vs Profit - Which Do You Focus On?FREQUENTLY ASKED QUESTIONS Q: How much money do I put on per trade? A: I personally adjust my position size depending on the currency pair and stop loss difference to cap my loss at a maximum of 1% Q: How many pips do i look to achieve Daily / Weekly / Monthly. A: I never set percentage or pip goals, this can cause impulsive emotional behaviour which forces you into taking positions that may not meet your rules to attain the extra percentage / pips required for the Day / Week or Month. Q: What is my average pip stop loss. A: My stop loss is based on structure and 4 main indicators and not on pips. There is a huge misconception when trading a fixed percentage of your capital that the more pips you attain the more profit you accumulate, however i have illustrated above and explained below why this is not always the case. Let us look at a hypothetical trade example: Trade 1 - Take profit +1% ( +50 pips ) Trade 2 - Take profit +1% ( +50 pips ) Trade 3 - Stop loss -1% ( -200 pips ) Total: 1% Capital profit -100 Pip loss Slippage. Unfortunately slippage is an unavoidable part of trading where your broker closes your order for a different price than what you set in the initial order form. Although this is overlooked by many traders it is something that should be taken into consideration prior to any position.
Education
by UnknownUnicorn180388
25
USD/JPY - 2618 Trade Explained USD/JPY - H1 - 2618 Trade Explained Having had a double top and now approaching a retracement back into the 61.8% Fib level, we can now look for reasons to short the USD. Unlike patterns we can't just place BUY or SELL orders in advanced. Once we have completed the rules of engagement below, we are looking for confluence within a certain area that all coincide. This in the long term will give us a better success rate. Rules Of Engagement 2618 - Double Top - Break below Neckline / Support - 0.618% Fibonacci retracement - Stop loss above double top - Target 1 at 38.2% Fibonacci - Target 2 at 61.8% Fibonacci Good luck.
Education
by UnknownUnicorn180388
15