CHAPTER 27BACK-TESTING

Most know that it is important, but few know how to use it. A fundamental tool for your success in forex trading, back-testing is nothing more than gathering a series of data or events and applying to them the strategy or trading system we want to test so we can measure its efficiency. The key question is, if the great majority of forex traders “in the know” know that back-testing is essential, why is it that new traders and even experienced ones do not employ this feature at its full potential?

There are two distinct answers to this. One is that many can find it boring or tiresome. They don’t understand or simply don’t care and prefer to jump into the market with their strategy in a demo account or even in a real account. ...

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