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US under Martial Law? – Not yet, but…

Some of you undoubtedly have seen the video posted on YouTube on September 28th, 2008 where Texas Republican Michael Burgess suggested that the US was under Martial Law.

This isn’t entirely true BUT it’s worth reading a follow up article by Ian Brockwell that provides some interesting insight on the situation.

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US under Martial Law? – Not yet, but…

Ian Brockwell
September 29, 2008

In a “hot” new video appearing on YouTube, Rep. Michael Burgess (R-Texas) stated “I understand we are under Martial Law, as declared by the speaker last night”Whilst this is something that you might expect the speaker (Nanci Pelosi) to declare and the Bush administration to desire, Mr. Burgess was hopefully using the term “Martial Law” in a figurative manner, in order to express his disgust (and that of many others) at the way in which this “bailout” deal is being conducted.

George Bush has created many new executive orders during his term, enabling him to introduce Martial Law for a variety of reasons: A terrorist attack, civil disturbances, Flu outbreaks, weather related disasters and more. It is not impossible that he could declare the current financial crisis as a “National Disaster”.

However, the real problem lies with the Federal Reserve and the power they have to control the United States (and many other institutions around the world), including the political system of course.

The Federal Reserve is nothing more than a private bank (with no reserves), run by people who used to be called “money changers” in bygone days. They may have a fancy title today, but their motives have not changed.

These “money changers” have been around for more than 2,000 years, manipulating world events and money supplies, in order to satisfy their greed and need for power.

Having the ability to control a country´s money supply enables them to dictate the destiny of others, by creating a false crisis in order to buy up failing companies at a fraction of their real value, which later become very profitable when they decide to increase the money flow again.

This control is used on the stock markets, forcing prices down to make an attractive “buy”, guaranteeing a very healthy profit in the future (and more control over the competition).

We have seen these tactics being used for centuries, with “money changers” either using existing problems to make a profit, or creating them (including wars).

A good example is the owner of a coin shop in Frankfurt Germany, whose sign over the shop was a Roman Eagle on a Red shield. In German “Red Shield” means Rothschild. The Rothschild Family (usually referred to as just the Rothschilds) is an international banking and finance dynasty of German Jewish origin that established operations across Europe.

The beginning of the Rothschilds “fortunes” began during the early 1800´s, where Nathan Mayer Rothschild made huge profits from the Napoleonic wars and a somewhat dubious deal with the Prussian government.

Their influence (and one could say their methods) are still very much in evidence today. Check out J.P. Morgan, their connections and the role they are playing in this crisis.

We only have to look at those behind the Federal Reserve (then and now) to clearly see that the financial system is still run by “The Usual Suspects”.

The proposed “bailout” will not solve the problem, the problem is the system itself and those who control it, only by changing that will the situation improve. In the meantime we remain in the hands of the “money changers” and must whistle to their tune, whilst pretending that the paper they print is money!

Martial Law is still a possibility, but the “money changer´s law” is the root of the problem and that is what needs our most urgent attention. But does anyone have the courage to take them on?

Original article can be found at: http://www.americanchronicle.com/articles/75831

Check Out The “Money Day Finder”

Our office received a direct mail piece today advertising the Money Day Finder by Copp Clark Professional that I thought was interesting.

It in essence is a trading and investment desk calendar geared to the North American markets and looks like this:

The site lists it as:

Ideal for investment/term deposit administration, treasury and cash management and financial planning. Our year-forward format provides day-counts and thirty-day periods from each businessday and ensures against interest losses due to unanticipated weekends and bank holidays.

It also includes:

  • 10-year Reference Calendar with holidays and day counts
  • Year-forward presentation
  • Instant value dates and day counts
  • Highlighted 30-day periods
  • 10-year mid-term tables for each business day
  • Daily count-back tables to past dates

Cost for the 2009 version is $37.95 CAD and $19.95 CAD for the base.

So if you’re thinking of buying a handy investment calendar for your desktop consider having a look at Copp Clark Professional’s Monday DayFinder.

More information can be found at: www.coppclark.com/MoneyDayFinder.aspx

Check Out “Personal Stock Streamer” 9.2.1

If you’re a MetaStock user consider having a look Personal Stock Streamer to help manage all of your investment accounts, watchlists and holdings all in one place. This is free software download (when using select brokerage accounts).

According to http://softsia.blogspot.com/2008/09/personal-stock-streamer-921.html here is a a quick rundown of this nifty little program:

Personal Stock Streamer (PSS) is a complete stock streamer and trading platform for the active US investor.

With PSS, investors can:

  • Track hundreds of streaming stock tickers
  • Manage multiple accounts and portfolios
  • See intraday and historical charts with candle, line and OHLC types and technical analysis indicators including SMA, MACD, RSI, Money Flow, Bollinger Bands, Momentum, and many others
  • Mark up charts with annotations
  • Produce asset allocation charts
  • Collaborate and share stock tips and live annotated charts in real time
  • Create watchlists
  • Record filled orders in a complete transaction register supporting buy, sell, dividend, dividend reinvest,share transfers, return of capital, sell short, buy to cover and split transaction types
  • Retrieve options chains
  • Execute live trades through US exchanges including the NYSE, AMEX, & NASDAQ
  • Calculate unrealized gain or loss on a lot by lot, ticker and portfolio basis
  • Produce capital gains reports
  • Send expression based alerts to email or mobile phones
  • Exchange data with Quicken(tm),Microsoft Money(tm) and Metastock(tm)
  • Feed live tickers into Microsoft Excel(tm) for custom analysis; create custom asset classes
  • Drag and drop Internet bookmarks
  • Use a currency table and converter
  • Place a light weight stock ticker bar on the desktop
  • Read per ticker news headlines
  • Organize view layouts with any of several dozen data fields including symbol, price, change, high, low, volume, spread, bid, ask, 52 week high and low, P/E ratio, EPS, dividend, yield, beta, market cap, gain, and others
  • Get quick access to online research including EDGAR and finance.yahoo.com among others
  • Use the scripting API to develop custom indicators, reports and extensions in VBscript(tm) or JScript(tm)
  • All for free w/ supported brokerage accounts.

For more information go to: www.PersonalStockStreamer.com

Relative Strength Comparison (RSC) The Key Success Tool In Trading – Part 3

By David Jenyns

In Part 2, of Designing a Trading System in MetaStock I covered how to code the first two of the four major components of a mechanical entry system. I had explained the coding of price and liquidity. In this article, I will cover the steps for coding the remaining two components, trend and volatility, into MetaStock. In the end, you will have the complete codes for a mechanical entry system.

Let`s begin with trend identification. Remember, `the trend is your friend` when trading. You always want to trade with the trend, not against it. Think of it this way, if you were swimming in the sea, and got yourself caught in a rip tide, is it easier to swim with the current or against it? It is the same with trading with a trend.

There are many ways to identify trends, and it`s not particularly important which method you use. You just need to use one. One of my preferred methods for identifying trending stocks is to find stocks that are trading at their current highs. You can do this by stipulating that the highest high price must have been achieved in the last `x` number of days.

Once again, the variables you use will depend on the time frame you are trading. But for this example, you want the highest high price in the last 240 days to have occurred in the last 20 days.

Using the formula reference section in the MetaStock Programming Study Guide, you can find the syntax of the highest high function, and then plug in the details. Then, using the `less than` symbol, you can specify the number of days must be less than 20. In MetaStock language that would be:

HHVBars(H,240) < 20

The final component to our entry system is the volatility measure. The aim of including this formula is to identify stocks that move enough for us to make a profit, yet aren`t so erratic that they keep you up at night. There are a few ways to measure volatility. However, my favourite is the ATR method. The ATR indicates how much a stock will move, on average, over a certain period.

For example, a one-dollar stock might move five cents on average over the last 20 days. You can divide this value by the price of the stock and you will have the average percentage movement of a stock. With these values, you can stipulate a minimum and maximum daily volatility value.

For example: You may want the ATR, divided by the average closing price, over the last 21 days, to be greater than 1.5%. Therefore, the average minimum volatility must be greater than 1.5%.

Additionally, you may want the ATR divided by the closing price, over the last 21 days, to be less than 6%. This sets the average maximum volatility at less than 6%. In MetaStock language that would be:

ATR(21)/Mov(C,21,S)*100 > 1.5 and

ATR(21)/Mov(C,21,S)*100 < 6

Putting all our code together, you see what your entry system looks like:

C>1 and

Mov(v,21,s)*C > 200000 and

HHVBars(H,240) < 20 and

ATR(21)/Mov(C,21,S)*100 > 1.5 and

ATR(21)/Mov(C,21,S)*100 < 6

You now have now a workable entry system. Not only did you construct a robust system, but it also adheres to the KISS principal (Keep It Simple Simon). This system can be cut and pasted into the Explorer within MetaStock. However, the entry is only the beginning of a successful trading system. In later parts of this series, you`ll find the rest of the components that you need to design a profitable trading system.

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David Jenyns is recognized as the leading expert when it comes to MetaStock and designing profitable trading systems. His MetaStock website offers a huge free collection of trading related tips and tricks. Gain free access now.

Click Here ==> http://www.meta-formula.com/subscribe
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Article Source: http://EzineArticles.com/?expert=David_Jenyns

Designing a Trading System in MetaStock- Part 2

In Part 1 of Designing a Trading System in MetaStock, I had discussed the major components you needed to be able to track to create a mechanical entry system. These were measures of price, liquidity, trend, and volatility. The question now is, how do we code this into MetaStock?

First, let me offer you the most valuable piece of knowledge I have acquired over the years about MetaStock formula writing. This one secret will turn you into a MetaStock master. Do you think I know all of MetaStock`s hundreds of pre-programmed formula and propriety indicators? Well, I`m good, but I`m not that good.

When coding in MetaStock, the key to getting it “right” is to write what it is you are trying to achieve “down in English”. Once you`ve done this, it is easy to convert it into a MetaStock formula.

Let`s look at an example. Our first entry condition is a measure of price. As mentioned in Part 1, you want to set a price minimum to remove speculative stocks. Please note that the values you select will depend on the exchange you are trading. Some markets tend to be more expensive than others. For this example, we are looking to design a long-term trend following system to trade on the Australian Stock Exchange.

In Australia anything under $1 could be classed as a speculative stock. So how do you stipulate that the stocks you want must be greater than $1? First, “write it in English”: You want stocks with a 21-day average closing price that is greater than $1. Now, you can convert this into a MetaStock formula.

Using the formula reference section in the MetaStock Programming Study Guide, you can check the syntax of a moving average. Once you have this information, it`s simply a matter of plugging in the correct numbers. Then, by using the “greater than” symbol, you can stipulate the price to be greater than $1. The MetaStock code will look like this:

Mov(c,21,s) > 1

Let`s move onto the next component, liquidity. This is a measure of how much money a stock trades. It is important to identify stocks that have enough money moving through them so that you`re never caught with a stock you can`t get out of. For this example, let`s say we require the 21-day average of volume multiplied by the closing price to be greater than $200,000. In MetaStock language this would be:

Mov(v,21,s)*C > 200000

In the next article I`ll go through the last two components needed to design a mechanical entry system in MetaStock. With this information, you will be well on your way to starting an effective, and profitable, trading system in MetaStock.

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David Jenyns is recognized as the leading expert when it comes to MetaStock and designing profitable trading systems.

His MetaStock website offers a huge free collection of trading related tips and tricks. Gain free access now.
Click Here ==> http://www.meta-formula.com/subscribe
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Article Source: http://EzineArticles.com/?expert=David_Jenyns

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Designing a Trading System in MetaStock – Part 1

By David Jenyns

In this three article series, I`m going to guide you through the process I use to design a trading system using MetaStock. I’ll cover the four major components that every successful trading system has in common, and then I’ll show you how to code these components into the MetaStock program. Please note that this is by no means investment advice and any information I cover is purely for illustrative purposes.

I am a technical analyst by trade. It is my belief that all fundamental and economic influences on a stock price are taken into consideration by the market. Therefore, I focus my attention on price action. All my trading systems are based on this understanding of the market, and the rules of my systems are built to respond to price actions. In this article, I’ll cover the basic rules of trading:

  • Entry rules (when you get into a position)
  • Exit rules (when you get out of one)
  • Money Management rules (how much do you put in a trade?)
  • Back-Testing (does the system work historically?)

These four components make up a proven formula for designing profitable trading systems in MetaStock. Let’s start with the first part.

A stock passing through a precise set of conditions creates entry signals before you will enter a trade on that security. I believe the rules set to signal an entry into a position should leave no room for individual judgment. I follow the KISS principal – that is they should Keep It Simple Simon.

Remember, there is no Holy Grail of entry systems. There is no MetaStock formula that will get you in at exactly the right time, everytime. With this in mind, it’s your goal to construct a simple, yet robust entry system.

Even though I always say that the entry is the least important component of any trading system, you still must have some way to enter a trade. Here are the points that I think are important to consider when identifying possible entry points.

PRICE: It is important to set price maximums/minimums because a stock’s price can determine its attributes. For example, speculative stocks tend to be cheaper, and blue chip shares tend to be more expensive.

LIDUIDITY: This is a measure of how much money the stock trades at. You need to set minimum levels of liquidity to keep you out of stocks that simply don’t trade enough. You can risk being trapped in stocks where the market is moving against you if they have a low liquidity.

VOLATILITY: This measurement tells you how much a stock moves. It is important to trade stocks that move enough for you to make a profit, yet aren’t so erratic that you can’t sleep at night.

TREND: This is the cornerstone of technical analysis. Remember that “the trend is your friend” and that you always want to trade with it, not against it. You will need a way to measure trend in your system.

TRIGGER: This is the point that will indicate it is time to enter a trade. The trigger condition occurs only at one point in time and doesn’t hold “true” over extended periods of time, such as with a moving average cross over.

When combined, these components are going to make up your entry rules. But, before we even begin coding this into MetaStock, you need to determine one of the most critical elements of any system. What time frame are you going to trade?

+ Short-term, such as a reversal trader

or

+ Long-term, such as a trend follower

There are distinct differences between these two types of systems and your choice here will have a marked effect on every other decision you make about your system.

Short-term systems tend to require a greater time commitment, and more money. However, the benefit of trading more often is that usually your profits are more consistent, and are realised more frequently.

Conversely, longer-term systems tend to require less time, and less money. However, since you are keeping your positions open longer, you need to wait until positions are closed out before you can collect any profits.

Generally, I steer my clients, particularly those who are just starting out, to a longer-term trend following system. It takes less time, less money, there is less risk and it is easier to do than short-term trading. In addition, trend following systems tend to have a higher win to loss ratios and are psychologically easier to follow because of this.

For the sake of this example, let us construct a trend following system. In the next two articles, I’ll explain how to code the four entry components of a trend following system into MetaStock.

David Jenyns is recognized as the leading expert when it comes to MetaStock and designing profitable trading systems.

His MetaStock website offers a huge free collection of trading related tips and tricks. Gain free access now.
Click Here ==> http://www.meta-formula.com/subscribe

Article Source: http://EzineArticles.com/?expert=David_Jenyns

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How To Loose Everything — The Worst Forex Trading Strategy Ever That You Might Be Using

You may be wondering, `Why would David Jenyns write about the worst Forex trading strategy around?`

There are a couple of reasons:

First, to warn you about the worst Forex trading strategy, because you really don`t want to end up using this system.

Second, because once you know the worst possible Forex trading strategy, the one that is designed to maximize your losses over the long run, then you can reverse it to craft a strategy which does the exact opposite.

With what you learn from the worst Forex trading strategy, you will be able to create a system that will produce some tremendous long-term gains. The worst Forex trading strategy I`m referring to, which is simply the worst Forex trading strategy I have ever encountered, is known as averaging down. This horrifying Forex trading strategy is the process of buying more shares that you had previously acquired, as the price drops.

Traders often purchase shares this way in an effort to reduce their initial entry price.

Only bad investors average down by buying shares of a sinking assests to decrease their overall average price per share. This Forex trading strategy is hardly ever effective, and is often like throwing good money after bad. It also magnifies a trader`s loss if the share keeps dropping. Remember, just because a share is cheap now that doesn`t mean it`s not going to get any cheaper. However, let`s examine how this devastating Forex trading strategy works. Say you bought one thousand shares at $40.

The novice investor may not have a stop loss in place, and the share price falls to $30 dollars. Here comes the stupidity of this Forex trading strategy — to average down the novice trader might by another thousand shares at $30 to lower the average cost per share that he`d already purchased. So, his average cost per share would now be $35.

Unfortunately, the share price may fall even further, and the novice trader will again buy more shares to reduce the average cost per share. They end up buying more and more into a share that`s losing their money.

Now, imagine this Forex trading strategy being applied to a portfolio of assets. In the end, all the capital will automatically be allocated to the worse performing assets in the portfolio while the best performing assets are sold off. The result is, at best, a disastrous underperformance versus the market.

If a trader uses an averaging down system and uses margins, their losses will be magnified even further. The biggest problem with this Forex trading strategy is that a trader`s gains are cut short, and the losers are left to run. My advice is — never average down. The process of buying a share, watching it fall, and then throwing more money at it in the hopes that you`ll either get back to break even or make a bigger killing is one of the most misguided pieces of advice on Wall Street. Never be faced with a situation where you`ll ask yourself, Should I risk even more than I originally intended in a desperate attempt to lower my cost and save my butt?`

Instead, design a simple, robust system with good money management rules. I can practically guarantee the results will be better than averaging down.

by David Jenyns

http://www.ultimate-trading-systems.com/forex.htm

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Important information for clients using MetaStock 8.0 and 9.0

To All Owners Of MetaStock:

In order to continue giving clients the best possible software and data experience, it is sometimes necessary to discontinue product support of older versions of MetaStock. For this purpose, as of December 31, 2007, Equis International will no longer be providing product support for MetaStock versions 8.0 and 9.0. Note: versions 9.1 and above will not be affected by this change.

Please review the following frequently asked questions to better understand the end-of-life cycle, how it will affect you, and what options are available:

Who will be affected by this change?
All clients using MetaStock versions 8.0 and 9.0.

How do I determine which version of MetaStock I am using?
If you are not certain which version of MetaStock you are currently using, open the MetaStock application; select the “Help” menu then “About MetaStock.” The version number will appear at the top of the resulting dialogue box.

Will I be able to continue using my version of MetaStock?
Though your version of MetaStock will continue to operate, you will not be able to receive symbol database updates. Moreover, you will not receive product updates, software patches, or service communications.

Will I be able to receive customer support via phone, chat and e-mail?
We work hard to support all MetaStock clients. Within reason, our customer support call center will continue to support clients with older versions of MetaStock.

What are my options for upgrading to the current version of MetaStock?
MetaStock 10 is our most current version. It features a variety of enhancements not available in previous versions. These include the RMO Trading System, custom time intervals, Fibonacci Projections, an enhanced Explorer, Windows Vista compatibility and more. It is available at a drastically reduced price to clients affected by this change.

• 9.0 End of Day to MetaStock 10 for $149.00 USD
• 8.0 End of Day to MetaStock 10 for $249.00 USD
• 9.0 Pro to MetaStock 10 for $249.00 USD
• 8.0 Pro to MetaStock 10 for $349.00 USD

Also note: If you have End of Day and would like to upgrade to the Pro version upgrades are available to you as well.

For more information on upgrade pricing please go to visit our MetaStock Upgrades options page.

If you have additional questions regarding this change, or if you would like to upgrade to MetaStock version 10 at the reduced price contact us toll-free at 1-877-386-3763 (in the US) or 1-877-463-7638 (in Canada).

- The FundSoft Team

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Scam Artist or Ethical Stock Broker? – How You Can Tell the Difference

The quickest way to tell if your stock broker is a scam artist, using your account for broker profits rather than yours, is to look for evidence of “churning.”

Say you have just opened a stock brokerage account and your broker puts you into Fast Buck Industries as your very first “investment.” You get your first statement and see that she has traded Fast Buck three times. You also note several stocks listed that you had not discussed.

It’s only unethical or illegal if you get caught, is often the rationale.

You ask a few knowledgeable people, who know a little something about the stock brokerage business as well as stock scams, and they feel that your new broker is a scam artist who is “churning,” buying and selling for your account–frequently–in order to generate more income for herself through increased commissions. A shark is the only fish that can blink with both eyes, you might note, as you try to fit applicability to scam artists.

This practice–”churning”–occurs more often than you might think. Many people succumb to their broker’s appeal to give them “flexibility” so they can react quickly to take advantage of fast-rising opportunities, for the benefit of their customers. Whereas you could have easily avoided all this in the beginning by simply refusing to sign the discretionary papers giving your broker authority to trade on your behalf, without your prior authorization. “Experience” is a socially-accepted word people often use to explain accumulated mistakes. This mistake would have to be classified as a substantial contributor.

O.K., so you had granted your broker–or scam artist?–such unilateral authority. Losses to you occurred, while commissions to your broker mounted. What to do now?

You have multiple avenues of recourse. First you must protest, in writing, immediately. (Failing to do this could be deemed tacit approval, on your part, for what your broker has done.) Conflict of Interest is a possible complication to check out. Suitability Claims is another. (Has the broker fitted the trades to your “risk profile?”) Misrepresentation is a good one.

(Failure to disclose important information to you involving the trades.) Unauthorized trading. (This brings the focus right back to where you started: what exactly does the document say–in what words–which gave your broker authority to trade for you in the first place?)

In self-defense, a broker will commonly sell off the winners to show, at least, a small profit. Don’t be fooled by this. This could still be scam artists’ activity. The losses were most likely retained.

In business, stocks are the basis of essentialism. In the beginning your broker may have played herself up as the greatest authority on free enterprise stewardship since J.P. Morgan. But, to counter the hype, you must consider all angles. In many ways, stock scams are now a whistle blower’s delight. So many new tools have been made available to the stock-buying consumer (including, even, the infamous Sarbanes-Oxly Act) that you now have every chance of getting justice over any stock “churning” dispute. Nobody cares if you can’t dance; just get up and dance. Fast, decisive action on your part is key.

The Con Man’s Blog, and first two chapters of Jack Payne’s legal thriller book, Six Hours Past Thursday, are now available online. Both readable for free. You are invited. http://www.sixhrs.com

David Jenyns – The Secret Art of Backtesting

Here’s a great article on back testing from our good friend David Jenyns, author of the MetaStock Programming Study Guide, available for purchase at: www.metastock.ca/training/metastock-programming.aspx

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Original Article: www.makeupblog.cn/real-estate/the-secret-art-of-backtesting.html

The Secret Art of Backtesting

If you have not back tested your trading system, you might as well trade with your eyes close.

In fact, whatever technical analysis criterion you use to trade with, be it moving averages, candle sticks, volatility breakouts, fibonacci retracements or any other trading system you have devised you’re going to need to back test your trading system thoroughly and objectively in order to remove any possible doubt about it’s capability.

To remove any self-doubt you need to thoroughly back test or simulate your trading system in such away that it matches the conditions under which it will be traded. Once you have established that you have a reliable and robust trading system only then will you be confident in trading your system.

When trading what is the question in most traders’ mind?

To answer this question I shall quote the introduction from Chapter 8 Back Testing of Mark Jurik’s book Computerized Trading:

Will my trading strategy be profitable? After having gone through the arduous process of crafting a trading strategy, these are the questions you must ask yourself. The ability to answer these questions are the great promises that back testing holds out for all traders. A successful back testing procedure will greatly reduce the probability that you will begin trading with either an unprofitable strategy or one that does not meet your expectations. By adopting a sound and rigorous back testing approach, you will:

  • Pinpoint which approaches to the market that are likely to be successful and which ones are not.
  • Generate good estimates of future performance for each trading strategy you test.
  • Create a record of your trading strategy’s historical trading performance.
  • Produce data necessary for other components of your trading approach such as your asset allocation strategy.

Important Trading System Criteria

Profitability is not the only criteria by which a trading system should be evaluated. Drawdown and stress should equally be considered as well… for example, before you open a trading account:

  • Are you satisfied that your system is reliably profitable?
  • Will draw downs wipe out your account?
  • Is your system trading in a way you can tolerate?
  • Can you tolerate long periods of no trading or too much trading?
  • Can you tolerate a large string of losses?

The only way to answer these questions is to subject your trading system to extensive back testing.

Lack of Confidence

Lack of confidence usually forces traders to question their own trading systems. They give into the temptation to modify their trading plan with devastating consequences. This temptation spawns on by a string of losing trades or an opportunity to replace their trading system with a whiz-bang indicator that is usually talked about in traders chat forums.

Anything that sounds to good to be true will attract the attention of a trader who is not satisfied with their own trading system simply because they have not properly tested their system in the first place. In addition, they have not built up the necessary confidence needed to successfully trade the system developed.

In the end these negative subconscious thoughts will only hinder and destroy your ability to trade successfully. To improve your confidence in your trading system you need to thoroughly and objectively back test it – simple as that! Only then will you be confident enough to commit time and money to it!

The Traders Dilemma

How can you test how a trading system will perform over a period of time when trading an arbitrary group of securities?

— To truly evaluate the past performance of a trading system you need a trading simulator, which mimics the day-to-day trading activities of a typical trader. Until now this kind of software has been out of the reach of most traders. In fact, there has been some great headway in back testing software. Personally, I use TradeSim with MetaStock.

TradeSim is the first realistic true trading simulator/analyzer for Metastock that can quickly back-test and evaluate a trading system across a portfolio of securities. With its powerful data processing capabilities, TradeSim can evaluate the historic performance of a given trading system within a matter of minutes and do it with a realistic representation of a real-life trading scenario. Whether a single security or a multiple security portfolio, TradeSim answers the simple question:

“What would of happened if this system had of been traded in the past using an arbitrary portfolio of securities?”

Sounds simple – but is extremely complex if not impossible to do with Metastock as it stands alone. However, with TradeSim it is just a simple matter of running a Metastock exploration on a portfolio of securities using your own set of indicators. When the exploration has finished you just simply run TradeSim and analyse the resulting trade data.

Your system may look good with an expert overlayed on a single chart.

“But what about it’s real world trading performance?”

Typically, your system will consist of entry and exit triggers, prices as well as an initial stop loss. These five parameters basically define a framework for a trading system. The trouble with trying to back test a trading system is that the system tester built into Metastock is only extremely limited. As a result, this can give a very distorted view of your potential trading system performance. TradeSim addresses all of these issues whilst exploring new ground in technical analysis and uncovering new issues that have not been addressed by current software technologies.

Remember, no matter what back tester you go for, anything that sounds too good to be true will attract the attention of a trader who is not satisfied with their own trading system. This due to the fact that they have not properly tested their system in the first place and have not built up the necessary confidence needed to successfully trade it.

In the end, these negative subconscious thoughts will only hinder and destroy your ability to trade successfully. To improve your confidence in your trading system you need to thoroughly and objectively back test it – simple as that! Only then will you be confident enough to commit time and money to it! By testing your system, you have just put yourself into the top 1% of traders.

Further Reading On Backtesting:

  • Practice vs Funded Trading vs Backtesting
  • - BACKTESTING – for me, this is not done real time and these are more drills for me. Often I will go through a lot of data in a very short amount of time, also trading using my trading strategy. For example, I could trade 6 months worth …

  • Economics : Back-testing for Oil
  • - As a trader I like to do back-testing product that I trade in. The process of testing trading strategy in previous periods. Instead of applying a strategy ahead of time, which could take years, a trader can make a simulation of his or …

  • Forex Strategies Are Developed Through Backtesting
  • - For anyone looking to t…

  • Back testing
  • - I stumbled on a pretty good entry tactic, one I have seen I guess but I couldn’t trade on my own it’s too weird. I have been testing this along with different types of exits on the stocks that appear on my trade ideas scans, …

  • Wanted: Forex Back Testing Resources
  • - If anyone out there knows of automated back testing resources for Forex trading, please let me know of them. Today I was kicking around some ideas I’ve had for my Forex trading and I came up with something that I really want to try. …

  • Secret Art of Back Testing
  • - Back testing is the process of testing a trading strategy over historical data to determine how well it would have performed over that set of data. Interpreting these results then provides the trader with sufficient information to …

  • Backtesting Metatrader History Data for FAPS, Tracer and Bogie
  • - Remark: Despite having the full historical data, I was only able to generate backtest results from April 07 and I wondered why. I am really keen to find out how it faired with FAPS in 2005. (Has anyone seen its results?) …

  • Back Testing for Better Trading Results
  • - In today’s guest blog post I asked Ingela Troha to talk about something that has plagued me, and millions of traders each and every year…it’s back testing! Please read the full article, and put the info to good use! …

  • Back-testing a forex trading system
  • - While it is true that past performance does not indicate the future, the only reliable information we have is about the past. A few important things make a difference between unbiased trading-system testing and self-delusion. …

  • BackTesting and Assessing Strategy Performance.
  • - I’m developing a solution which will allow me more flexibility in backtesting and more especially live testing of my trading activity. Essentially it uses three components: 1) A spreadsheet for all trade information …

  • The Secret Art of Backtesting
  • - The ability to answer these questions are the great promises that back testing holds out for all traders. A successful back testing procedure will greatly reduce the probability that you will begin trading with either an unprofitable …

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