moonchild
VIP Contributor
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After learning Forex and understanding different strategies, you end up settling with one, so you might wonder how can I test a strategy before using it, this article is going to explain how to test a strategy easily.
Firstly, go to the four hour time frame, and scroll back as long as you can let's say three years back, then start looking for confluence for your strategy, wherever you see your strategy playing out get a notebook and record whether its is a win or loss, do it like 100 times, from there you will be able to know how accurate your strategy is.
For example lets say, bullish engulfing candle its my strategy, I will go back in time and take note of where it happens and then record the number of wins and losses, from there I would be able to know the accuracy of the strategy, anywhere around 60% is okay, but if you have anything lower than that then you will have to review your strategy or tweak it.
This process is called back testing, it gives you clarity on your strategy, if you have any experience with back testing please share with us in the comment section.
Firstly, go to the four hour time frame, and scroll back as long as you can let's say three years back, then start looking for confluence for your strategy, wherever you see your strategy playing out get a notebook and record whether its is a win or loss, do it like 100 times, from there you will be able to know how accurate your strategy is.
For example lets say, bullish engulfing candle its my strategy, I will go back in time and take note of where it happens and then record the number of wins and losses, from there I would be able to know the accuracy of the strategy, anywhere around 60% is okay, but if you have anything lower than that then you will have to review your strategy or tweak it.
This process is called back testing, it gives you clarity on your strategy, if you have any experience with back testing please share with us in the comment section.