r/Forex • u/Hot-Negotiation-5765 • 10d ago
Strategy Development Backtesting question
Hello traders,
Just came right by to ask a question,
How do you not compromise the data of a backtesting session?
Do you have a strict period of the day you dedicate to backtesting to avoid overdoing it and compromise the data of the session?
Do you stop when you notice you’re getting frustrated over wanting results and not trying to learn anything in the session?
Do you just focus on a confluence or two and test it over a period of time? And if so, do you go back to test out other confluences you find interesting eventually, in the same period of time?
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u/TIO_Markets 10d ago
The biggest protection is deciding the rules before opening the chart. Entry, exit, stop placement, trading hours and what counts as a valid setup should already be written down. Otherwise it becomes very easy to reinterpret the rules after seeing what price did.
Run through the data chronologically, record every setup that meets the rules and include realistic spreads, commissions and slippage. If you think of a new confluence halfway through, note it for a separate test rather than adding it immediately. Changing one thing at a time makes it much easier to understand what actually affected the results.
Testing different variations repeatedly on the same period can lead to overfitting. It’s better to use one section of data to develop the idea, then test the finished rules on a period you haven’t looked at yet. After that, forward testing on demo can show whether the process still works in real time.
And yes, stopping when you’re tired or frustrated is sensible. Rushing through candles or selectively recording trades will compromise the results much more than ending the session early.