Sir, what is your opinion regarding backtesting a trading strategy? There are many traders who are backtesting their strategies and are depending on the results they get.
You are a very experienced investor and trader, and so, you can possibly tell a lot of things about a stock, by looking at its chart, like Sherlock Holmes from a stick, so I believe you have not done any backtesting. But even traders with a few years of experience, who can code, are backtesting their strategies, talk about their win rate, draw downs, risk to reward etc. It has become important, or so it appears at least, that a strategy should be backtested to see if it can be profitable or not.
AFAIK, you are more focused on technofunda and depending upon your conviction, you take big bets, and as such, there isn’t any necessity for your style of investing/trading to backtest, or yours should not be even called a strategy, you are beyond this.
But what about regular traders, who are learning the tropes of trading manually, with good old candlesticks, some indicators, absorbing slowly, internalizing a process, and taking trades, can they continue, or their strategies also have to be backtested, only then they can go forward.
I am aware of different schools of thought w.r.t investing, there are many ways to skin the cat here, but do such ways exist in trading too, or is that, as trading has shorter time frame compared to investing and stop losses, targets exist, and positions are taken on some basis like momentum, so all these have to incorporated into the strategy which has to be backtested with the data available, otherwise no matter how hard a trader might have been working, he will end up in losses as his method is not sound, if he had backtested his strategy he would have known that.
Your views please.
Thank you in advance.
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