back testing trading strategy --- rules and drawbacks of this strategy in forex.

Back testing past mi simulation ko kaha jata hai. Ap past sy deta pick karty hain or es ko trading strategy ma use karty hain kay market ma kiya hony wala hai. Trading system kuch rules par depend karta hai jo trader ko ye batata hai kay es time par market ma kon sa trend hai or trader ko buy ki trade ko open karna hai ya sell ki. Back testing ma ham ye check karty hain kay es system ny past ma money collect ki hai ya ni. Ap esko just predent karny kay laye use karty hain kay ap kay pass system hai or ap ny esko use kiya hai. Agr ye ban jata to shahid ye best system hota.



What is back testing in forex.

Back testing ma ap past sy data collect karty hain or eski future ko predict karny ma use karty hain. Ap es information par trade karty hain kay ap kay pass ik trading system tha or ap esko buy or sell ki trade ko select karny laye laye use karty thy. Jesa kay ap ik race ma hisa lena chahtyn hain to apko ye to pata hona chahe kay ap ketna fast run kar saktyn hain. Es ma problem ye hoti hai kay serf trading method ko justify karny kay laye use kiya jata hai. Back testing ka matlab he ye hai kay ap past data ko use kar kay ye find karna chahtyn hain kay ye profit hasil kar paye gi ya ni.



Rules for back testing a trading strategy.

Back testing kay kuch rules hain jin ko ham es topic ma discuss kar letyn hain. Ik to ap ny back testing es time par ni karni jb market bull state ma ho ya bear state ma ho. Second ye kay ap ny small universe or large universe ko bi trade ma consider kar kay strategy ko develop ni karna. Third ye kay high ya low volatility kay time par bi ap ny trading strategy ko develop ni karna. Es trading ko develop karny kay laye high exposure or low exposure ko bi use ni karna. Some time esa bi hota hai kay ap working ko start karty hain or market change ho jati hai to ap ny apni working ko stop kar dena hai. Jb ap apni strategy ko over optimize kar letyn hain to ye bhot hard ho jata hai ap kay laye kay ap esko understand karyn. Es ka sedha matlab ye hai ap ko eski change kar lena chahe.



Drawbacks of back testing forex trading strategy.

Forex back testing kay bhot sary drawbacks hain jin ko ham discuss karty hain. Ye testing totally assumptions par chal rahi hoti hai es laye ye reliable ni samji jati. Secondly ye strategy past data ko use karti hai kay past ma ye howa tha to es bat ki kio confirmation ni hoti kay future ma bi esa he ho ga. So trader ko chahe kay wo hamesa small lot sy trade kary agr wo es strategy ko use karta hai to. Secondly trader ko other technical tools ki help bi lena chahe.