If you have not backtested different ways of turning your trading system on and off in different market conditions then you could be leaving a lot of money on the table OR suffering big drawdowns and losses unnecessarily.
If you have not backtested different ways of turning your trading system on and off in different market conditions then you could be leaving a lot of money on the table OR suffering big drawdowns and losses unnecessarily.
Winning trades can feel like riding a zip-line… particularly if you trade stocks using trend following (trend trading system).
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There can be a feeling of nervous anticipation just before taking a trade, and when the trade is moving in your favor you never want it to end…the hope that it will go to the moon sometimes gets the better of us. In the cryptocurrency space they say HODL or hold on for dear life. But this is a HUGE trading mistake.
Backtesting is one of the most powerful tools stock traders have to evaluate the performance of their trading strategies, trading ideas and entry and exit signals.
Manual backtesting or paper trading is just not sufficient to get a real understanding of how a system performs and is way too time consuming. Automated backtesting using Amibroker is extremely fast, allows you to generate thousands of trades over decades of market history quickly and easily. Plus Amibroker provides a comprehensive performance report with statistics and graphical outputs to help you understand the performance of your trading system.
You can make money in volatile market conditions caused by world leaders, geopolitical events and uncertain economic conditions. But you cant keep trading the same way as you do in a bull market… nor can you let fear get the better of you and dump everything and go short.
Stock Trading Video from John Day Fossil Bed National Monument
New traders lose money and quit because of their behaviour in the markets. This is not usually intentional… but it is the behaviour of the trader that causes it. You wouldn’t go into the water scuba diving without first following a safety checklist to make sure you don’t drown. So why would you not follow a safety checklist before you enter the market?
Learning to trade stocks makes far more sense than leaving your money with a Professional Fund Manager – Here is why !!
Momentum is critical to your stock trading success. Not market momentum, personal momentum! The biggest thing I find that slows momentum in traders is overwhelm about all of the ways they could trade the stock market.
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There are countless stock trading indicators, trading strategies, instruments, trading systems to choose from. Unless you get completely clear on your stock trading objectives this can be overwhelming… and trading overwhelm causes inaction which leads to huge opportunity cost and loss of future wealth.
Bold marketing claims for trading advisory services, indicators, traders wanting to manager your money or trading systems can be tempting… but appearances can certainly be deceiving, as I found out in Milan.
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The Solution is to take control of your stock trading, backtest everything for yourself and become an independent and systematic stock trader.
Recent Stock Market history is never representative of what could actually happen in the markets. The Risk you face as a new trader is coming to the markets thinking that what we are experiencing. Now (whatever that is) is normal.