Backtesting

What happens when your backtesting results tell you that you have a great trading strategy, but your live results don't look anything like it? Do you change your strategy? Do you change your risk? Do you change your entry rules? Or do you simply accept that your live trading is never going to look as clean as your backtested results? The other day, I released an episode called Backtested vs.

Live Results and Good vs.

Bad Mistrades, where I answered a trader's question about the differences between those seemingly perfect backtested results and the much more messier reality of live trading.

Ready to go? Let's do it.

Welcome to the 11th episode of Season 2 of Backtest, the podcast about defining moments in market history and their timeless lessons.

I'm Daniel Gamboa.

I'm Matt Harris.

And I'm already picturing how Emily would be furious at me for convincing you to move to Minnesota.

Yeah, let's pitch this to our wives.

This might be the last episode we make on Backtest.

The point is that Cook was a master marketer and it does, in fact, paint a nice picture.

What about backtesting? Did you do backtesting or even when you're learning on your own, you're...

Oh, yes, yes.

Backtesting is very, very key.

I do understand that with backtesting, it can be expensive if it's like premium.

But I'd say if you're a beginner, even you can just take advantage of that one month free trial on TradingView, for example.

So you see backtesting as well.

There's a lot of layers to backtesting.

Backtesting is not just practicing entries.

Backtesting needs to be replaced with just practice.

So if you're a new trader and you're practicing to find fair value gaps, for example, that is a backtest.

Go and backtest identifying fair value gaps.

Identifying price patterns is a form of backtesting.

Backtesting is not solely tied to going on like a simulated, like a simulator, Epic Street Pay, TradeZella or whatnot, and just trying to find trade setups.