Part of the Setups That Work series. Most setups aren't the problem. The lack of a filter is. A setup with a 50% win rate and even risk-to-reward isn't a losing setup, it's an unfiltered one. Somewhere inside that data is a subset of conditions where it wins a lot more than half the time, … Continue reading Combining Setups With a Filter: Turning a Coin-Flip Setup Into an Edge
Backtesting Basics: Proving (or Killing) a Strategy Before You Risk Real Money
Backtesting exists to answer one question before money is at risk: do your exact rules make more than they lose? Here are the four ways traders fool themselves with backtests.