How to backtest

[hlpsg]

Hi all,
I'm a new member here, and a newbie at trading (but picked up a lot of good stuff on this forum, thanks!). I keep hearing about backtesting your system or strategy, but how do you get the past 5 year's data to backtest them on? Is there a place I can go to download historical data?

I"m trying to write a software simulator to help me backtest several systems I'm interested in now, but the problem is I don't know where to get the data to do backtesting.

Thanks!

 

[FetteredChinos]

for end of day, try


http://www.downloadquotes.com/en/


as always, lots of data has holes in it etc, and other errors, but these guys seem relatively accurate.

for intraday, the others may be able to suggest data sources.

there was one from a russian site, but i cannot for the life of me find the link!...

will have another look though,

FC

 

[hillbillie]

try http://www.wealth-lab.com/ if you trade US stocks.

 

[frugi]

http://disktrading.is99.com/disktrading/
not bad either.

 

[BBB]

I thought about backtesting, but my broker told me I could only trade in the present, not the past.

You've got to have anumber of techniques that work in DIFFERENT market conditions - because it's always changing.

Trying to trade the same 'system' in all conditions is a sure way to the poor house/loony bin.

If there was an optimum 'system' of indicators, signals etc, don't you think the banks with their wealth and computer power would discover it before you?

Save your time - forget about back testing - it's for analysts and guru's to justify their existence, and only makes the software developer rich, not the trader. Spend your time learning to trade what is happening now - its more profitable - trust me.

 

[BBB]

....if you do backtest, you must make sure you have time/sales data going back several decades.

 

[hlpsg]

Hi everyone,
Thanks so much for the links, I'll go through them in detail after work.

>>Spend your time learning to trade what is happening now - its >>more profitable - trust me.

I'm planning to read as many good books that I can to learn, and read forums to learn from other traders, and perhaps invest a little in the course offered here:-

www.daytradinguniversity.com

Besides finding a mentor who's willing to teach me, I'm not sure how else to proceed. Could the old timers give me some tips?

I'm really passionate about this and am willing to work very hard at it.

Thanks!

 

[hillbillie]

Watch out for all the hype and garbage out there(and in here) there are few who give exact details regarding technique and timing etc. Here's a starter http://www.elitetrader.com/vb/showthread.php?threadid=29005&perpage=6&pagenumber=1


simon

 

[hlpsg]

Thank you Simon!

 

[barjon]

The problem with backtesting is the impact of market shocks, those wholly unexpected events - such as a terrorist bomb as an
extreme example - which cause a major shift in the market. Often
what seem excellent results are merely those which have
fortuitously benefitted from those unpredictable (not that much is
predictable!!) price shocks.

Better, imo, to test your ideas in real time and with real money
(small) until you establish your confidence factor and can design
your trading and money management rules.