Backtesting 100 Times is a Myth

There's a common meme on the internet that backtesting a trading strategy 100 times proves that it works. That's simply not true.
In this video, I'll show you the math behind why that's false, another number that gets thrown around as the minimum number (and why that's also false), and how to figure out the real minimum number of trades.
🚀 Resources From Video:
Backtested strategy video: • Does the Connors RSI 2...
2nd backtested video: www.tradingheroes.com/75-win-...
Why I switched from MetaTrader: • Why I Switched From Me...
💎 RESOURCES
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Learn Forex hedging with this free PDF: www.tradingheroes.com/forex-h...
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NakedMarkets backtesting software discount: www.tradingheroes.com/nakedma...
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Get started with TradingView, the best charting on any device: www.tradingheroes.com/trading...
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My favorite trading books: www.tradingheroes.com/best-tr...
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My favorite trading software: www.tradingheroes.com/resourc...
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Trader funding programs: www.tradingheroes.com/resourc...
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Reprogram your brain: www.tradingheroes.com/resourc...
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Learn the complete backtesting process: store.tradingheroes.com/produ...
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MetaTrader EAs and custom indicators: store.tradingheroes.com/
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Free trading tutorials: www.tradingheroes.com/blog/
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[@TradingHeroes]

If this video helped you, a thumbs up (👍) is always appreciated. To get more trading tutorials, subscribe and hit the bell (🔔). Thanks 🙏 Get all of our best FREE trading tutorials here: www.tradingheroes.com

[@prasannachitnis892]

Sorry for mistake in my earlier post , there is typo error where I said " made 18PIPS profit".Its really 74 PIPS.Detail trades given.Unable to edit.😱

[@danielrioux54]

Excellent vidéo. I would like to add few things: 1. I define trending segments as strongly trending (bullish/bearish), mildly trending (bullish/bearish) and side movement based on a monthly chart; 2. I backtest each segment individually in the trading time frame for each segment. So I obtain results for each of the trading segment type. Pay attention to entry and exit price. Use smaller time frame to establish entry and exit price. 3. I am using a Monte-Carlo simulation to define the probability performance for each segment type. Use percentile-percentage results to assess performance. Look at R-multiple and %win in them Monte-Carlo simulation also to the number of consecutive losses to assess you maximum percentage of the account at risk. 4. Once done for one pair/stock/instrument repeat for other pair/stock/instrument for their own segment type and compare results. Should have statistically equivalent behaviour, if not return to step 2. 5. Once happy with the results, do forward testing by executing real trade but with VERY SMALL trade size. Using a monthly time frame identify actual segment type. Your results should be statistically equivalent. If not find why and return to step 2. 6. Once happy with the forward testing, perform real trade for the planned lot size. Using a monthly time frame identify actual segment type. Your results should be statistically equivalent. If not find why and return to step 2. If you optimize some of your parameters, do not use the one that provides the maximum result. Look at a range giving the best average results and take the middle value (median value) DO NOT START TO USE IN REAL TRADING A MODIFIED STRATEGY FROM A WORKING WITHOUT GOING THROUGH THE TESTING PROCESS.

[@TradingHeroes]

Yes!

[@opeyemi2077]

Yes, pls do a video on the London breakout strategy. Thanks for the teaching.

[@cryptoo434]

Appreciated the video very much ser!

[@TradingHeroes]

You're welcome!

[@kimmer551]

I would like to see a video on the London breakout system.

[@trustfultrading]

Great stuff!

[@TradingHeroes]

Thanks!

[@garfieldatlarge1222]

Hello Hugh, I would be delighted by a tutorial on the London Breakout Strategy. Thank you !

[@TradingHeroes]

Great, thanks for the feedback!

[@alabiopeyemi7875]

Thanks for this sir

[@TradingHeroes]

You're welcome!

[@khemrajrambarran9405]

do the London breakout video

[@adrianabrito7191]

I risked my whole life. There’s no plan B. The plan B is to get the plan A to work :)

[@Prinnagar]

Yo I also

[@rotherhiteboy]

Is FX and cypto the only markets you trade on?

[@TradingHeroes]

Stocks also.

[@LaughLand33]

1500 trades to backtest

[@unocaid]

🙂

[@renebleu8711]

Im profitable but I don’t back test at all.. i just look ar high and low of day, and decide for there.. backtesting seems like a way to over complicate trading

[@TradingHeroes]

Great!

[@danielrioux54]

Backtesting and forward testing are not complicating trading because once done, it is just a question of discipline toward the proven rules and monitoring the consistency of your results. You might be profitable but you are possibly missing the opportunity of being even more profitable on a consistent basis. As Dr. Alexander Elder stated, there are 3 components common to all exceptional successful traders: exceptional psychology, risk management and a proven trading process. Why not use approaches of proven successful traders? Trading is not gambling !