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Forums>StrategyQuant>General Discussion>How to quickly know if a strategy will be profitable in real trading?

  • #267717 |
    Customer
    20 Posts

    Hello,

    If we backtest a profitable SQ generated strategy, we will see winning and losing trades, but in the end, the strategy is profitable. The winning and losing trades might happen in groups, so we could have several losing trades before a winning one and visa versa.  Based on this, once I start trading the strategy on demo, how can I know that it is performing the way it did in backtest, considering that in demo I can also get several losing trades one after the other.

     

    Thank you in advance for any insight.

    #267722
    Customer
    791 Posts

    its more about your workflow, your robustnest testing… because from the MT platform, if we are talking about CFDs, you will get nothing more, which you could get from backtest if you download newest data and retest the strategy with SQX, results will be the “same”

    so what is the purpose to use a demo account – to prove that the strategy is trading as i see in the backtest?

    You want to be a profitable algotrader? We started using StrateQuant software in early 2016. For now we have a very big knowhow for building EAs for every possible types of markets. We share this knowhow, apps, tools and also all final strategies with real traders. If you want to join us, fill in the FORM. 1500+ final SQX strategies for members running on demo accounts to verify the edge DEMO ACCS. We provide also strategies for indices - DAX, DOW JONES, NASDAQ, SP, UK, because we have realtick data from our brokers.

    #267733
    tomas262
    Administrator
    1826 Posts

    Hello,

    you will never know after few trades whether the strategy keeps performing in the way it did on historical data. 10, 20 or 50 trades say nothing about the strategy. You need to define two very important things:

    1. time period in which you will evaluate your strategy (quarterly, half-yearly or annually)
    2. what the risk parameters are for the strategy – what maximum draw-down you are willing to accept for the strategy before it is put aside etc

    The only thing you can really manage in trading is to “cut losses”. It makes no sense to switch the strategy off just because it is just having a normal losing streak or the strategy equity moves sideways for few weeks. The most important character trait of a trader is patience :)

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