Example: Backtesting a Trading Strategy

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To get more information check out: What is the REAL reason for this trade?

Trading Strategy

Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. This website is neither a solicitation nor an offer to Buy or Sell currencies, futures, or options.

Join Stack Overflow to learn, share knowledge, and build your career. I have a Node. While I remember days, when interbank Money Markets trading was riding on REUTERS products, with fat add-ons for Excel spreadsheet based "analytics", but it is fair to say, that such days are forever away. Just compare how many trading events were common in those, just interbank-dealing days, prior to full opening of the FOREX trading via proxy-brokerages.

This first hand acquired experience has moved the crowd to some other means of how to integrate Trading Supporting Systems and the designs simply have never returned back for reviving a service, that has caused so much pain and costs, during that nightmare experience in wV. Supposing an above sketched Project is not a weekend hobby toy, the best sufficiently robust and platform-independet tool for such Project goals is to be defined, found and used. One may try to revive DDE , but it would be a try to jump a few decades back in time.

By clicking "Post Your Answer", you acknowledge that you have read our updated terms of service , privacy policy and cookie policy , and that your continued use of the website is subject to these policies. If you are interested in using Excel to backtest trading strategies my new Ebook course: My name is Mark Ursell, and I am a full-time individual trader and investor.

I am continually working on developing new trading strategies and improving my existing strategies. I have developed a series of Excel backtest models, and you can learn more about them on this site. Log in Remember me. Trading Strategy The criteria for the strategy are as follows: You can use Copy and Paste to quickly enter the data into your backtest.

Do not use Cut and Paste because it might affect the formulas in the backtest spreadsheet. The next step to testing your strategy is to enter your trading criteria. Many people trade using technical indicators and chart patterns. These are based on mathematical formulas and can be calculated using Excel. You can see from the video that it does not take very long to do this.

Most of the time you will not want to calculate the indicators from scratch. To make this quicker and easier I have written two eBooks that show how to calculate a range of technical indicators and chart patterns. To get more information check out: Both of these come with a spreadsheet containing all the indicator calculations.

Once you have the indicator in a spreadsheet you can simply copy and paste it into your backtest spreadsheet. If Statements are the key building blocks of all trading logic. The syntax for If Statements is: The formula would look like this: In the video, I used a trade entry criteria of entering Long when the price is greater than the EMA and the Stochsatic has crossed above the 20 line oversold line.

The first cell contained: We can make more sense of this if we translate it into pseudo-code. This means using normal language to explain each step. Exit criteria is programmed in exactly the same way as entry criteria. In Excel I used the code: In pseudo-code this means. They are calculated using a multiple of the ATR.