5 Backtesting strategies to consider when Trading

Saturday, January 1, 2011

Where in the world of trading, every minute detail can make a big difference between winning and losing everything. Backtesting lets check pre-built trading strategies under market conditions from the past. As a result, this can help you determine which route to take in the future. If something has worked well in the past, it may be worthwhile to consider today. With that said, here are five strategies backtesting, keep in mind when negotiating.

1. trend following
This strategy involves moving towards an existing trend when it is hot and then jump just reverses the trend. It may be difficult, and prediction, but trading platforms such as IQ Broker can help you stay on top of the direction we are moving things if they are with FOREX or stocks.

2. counter trend
With this strategy, you will indeed trade against the trend when there is a higher than normal value deviation. For example, if you have an oversold condition detected would want to trade opposite from this trend.

3. Dip buyer
Trading may result in extreme conditions, such as a rapid sale. In that case, the buyer buying security involves dip during this deiktwn with the hopes of making a profit when recovering thanks to the stock price eventually as a whole. The reasoning behind this is the stock price will eventually bounce back from an oversold condition.

4. Divide
NULL is a strategy that focuses the announcement backtesting. IQ Broker can help really stay on top of sharp price movements in a security, earnings announcement, purchase of event or something caused by news. As a result, this can help you identify potential buy and sell opportunities to flourish off.

5. Release
The final backtesting strategy worth exploring is dissipation, which identifies the commercial channels. Trading channels can consist of anything between the highest and lowest price of a stock has traded during a specified time. Furthermore, evolution strategies monitor movements of prices in addition to what is used for trading opportunities.

In the commercial world is flooded with various strategies, techniques and methods people use to get ahead in the game. It is almost impossible to know what will happen with stocks and FOREX 100%, but building strategies that are available can be highly beneficial. For this reason, take a look at each one of the strategies backtesting referred to in that article the next time you go on the market.


View the original article here

0 comments:

Post a Comment