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Backtesting Swing Trading Strategies: Everything You Need To Know

I wouldn't say I liked Backtesting until I realized it was the key to my success. After that, I reckon I wouldn't say I liked it because I didn't understand what Backtesting looked like.

I thought if I felt this way, how many others now feel this way?

Some Quick Tips For Backtesting

Backtesting is not demo trading or live trading. There is no money involved at all. Instead, Backtesting is the art of testing a theory until it's proven true.

You're like a scientist collecting data from past price movements on a price chart. Your job is to see how often your trading strategy works and when it doesn't work.

Test It On Multiple Currency Pairs.

Don't settle to test your strategy on one pair alone. As a swing trader, you won't have as many opportunities as day traders or scalpers because you're holding positions longer. The more options you see amongst more currency pairs, the better you are at learning how each pair moves.

Don't settle for One Take Profit

There will be times when 1 trade requires one entry. However, if you can squeeze in an extra trade, I recommend doing so. Taking more than 1 trade simultaneously can increase your return on investment and keep you from overtrading or forcing trades.


Challenge Accepted

One of my best clients , Sydney, challenged the traders in my trading community, Trade on Purpose, to backtest EURJPY from November 2012- December 2013. I gladly accepted her challenge and recorded each of the trades I would have entered.

Would it amaze you that I caught over 4000 pips in this single year I backtested? You can watch it below, and please be sure to take notes.

Backtesting is more than just seeing a trade.

You have to think about each move through and manage it as if you were trading it live.

Did you know you can backtest with me every Wednesday at 8:00 pm EST inside my Trading On Purpose Community? By joining Trade On Purpose Coaching Program today, you can also learn how to trade the exact strategy I backtested.

I'll see you on the inside and if you have questions, comment below.


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