PRO: CandlePRO Backtesting Coming SOON!
Before we get into the cool part of this announcement, just a reminder that PRO analysis for all pairs is out and available in your PRO dashboard (except for the free EUR/USD signal, which will be following very shortly). UJ and and AU are really the setups to watch at the moment, but GU and UChf both have short and long-term setups that we are watching as well. Alright, on to the real gem of this email: CandlePRO Backtester!
For those of you who missed the informal announcement in the PipHut discussions, a MAJOR enhancement is coming to CandlePRO in the next 7 days, all thanks to your feedback - CandlePRO Backtester (AKA Strategy Wizard):
One of the major hurdles to traders is a lack of confidence in their system, which leads you to exit positions early or close them too late. You end up feeling behind in the game on every trade. A remedy to this, and one that we advocate often is simple: backtest, backtest, backtest. You need to have confidence in your system, in your trades, if you are ever going to have any chance of successfully trading a strategy.
Enter CandlePRO Backtester.
If CandlePRO signals are your "night goggles" in the forex markets (customer quote!), then Backtester will be your night goggles into CandlePRO. We all know CandlePRO has a lot of raw power behind it - it detects new candlestick formations, looks at the past 50 similar formations, gives you average reward/risk ratios, forecast strength breakdowns and even tells you if it is a double or triple-pair candle. But one of the problems many beginners still face is a common trading question: where do I place my TP and SL levels? I need more direction.
Enter CandlePRO Backtester. CB piggy backs on to CandlePRO's Performance Report and intelligently backtests various TP and SL levels for up to 50 previous signals to determine where the most profitable SL and TP levels are. Not only that but it gives you total wins, total losses, Win %, Profit Factor (more on this in another post), net profit, # of consecutive wins and # of consecutive losses!
In the example above with a UJ signal we can see the results of backtesting on a variety of TP/SL levels to give you clear, actionable data on where to place your SL and TP levels - 45 pips TP and 23.4 pip SL would have given you a 57% win rate and netted you 354 pips if you had followed that system. Whether you choose the high win % signals or the high total net profit signals you will no longer be guessing at where the best SL and TP levels are.
Another issue many beginners have with any strategy is when NOT to enter a signal
Backtesting clears this up as well. If the backtesting results all come out negative or barely profitable then the signal is not worth your time - you need to be focusing on the highest-probability and most profitable setups only. Take a look at the backtesting for this EU signal:
See how no matter where you put your TP or SL levels if you had traded this signal in the past you would would not have been long-term profitable? Just look a the bad results in the right hand column! I know its not customary to advertise bad results but we just want to illustrate the point that backtesting will give you more objective data in where to put your SL and TP levels, both for good and bad signals.
Why is this so great?
This is what professional traders do: they backtest all their strategies. This is what we stress to new traders trying to come up with their own strategies: backtest, backtest, backtest. You need to have confidence in your system if you have any hope of following it.
In the past that meant going through each signal by hand, looking for the right conditions and manually determining if your strategy was a win or a loss. Lots of times doing it by hand also leads to some bias as you convince yourself you would have entered on this one, but not on that one and you end up with muddied results.
Not anymore. Now you'll be able to see, very clearly, the backtesting result of every TP and SL level and have confidence in the long-term sustainability of your trades.
*P.S. - we really tried not to over-hype this feature (hard to tell, we know), but this is really a very powerful tool - it will drastically change the way you use CandlePRO. We've been testing it for weeks now and we don't enter a trade with consulting backtesting now.