How does turning $10,000 to $90,000 sound to you..? Does that sound like a nice gain.? Well, below I share my results from testing out the daily alert candle strategy and using structure to enter trades. While this is only back testing results, it shows the power of sticking to the process in a strategy and creating a belief system like I mentioned in part 5 of Price Action Traders Mindset.
This is truly what we as all traders need to build as a foundation. It is one thing, like I have said before to think your strategy works, yet it is another to actually know it works. Back testing builds that belief system for you and simply keeps you on the right track.
In fact, without back testing I am sure 90% or more of all traders could not be profitable in this business. It is a core training tool.So, do I think all traders need to do back testing..? Heck yeah.
Above – The strategy tester I used in testing with this video is called Simple Forex Tester. To read my full review on this testing software.
Update – I now recommend traders use Forex Tester 2 for back testing, to find out more on Forex Tester 2 click here.
Above – Structure is literally everywhere in the Forex Market.
Overall in summary and going back to put everything in its right order, it all comes down to the process and sticking with it. If the strategy you are testing is not profitable shown through years of back testing then do not trade it, if it is and has shown it on many pairs over the years, then yes, it should give you confidence to move forward in your trading efforts. It is as simple as that, follow the process, except losses when they do happen and stick with what you know works overall.
Results Broken Down
The testing in the video above covers just under 7 years of trading, meaning taking $10,000 to $90,000 gave me an average gain of expectation of around 40% to 50% per year gain of full account. Taking into account the first year or so it was hard to see structure to the left which was actually a disadvantage to me overall. Meaning the results could of been much higher as seen in the video as well..