You need to back test your system and your strategy to see if you would be profitable in the stock market. I think it is critical for you to test your system and your strategy before you enter any real trades. Especially if you are brand new…
You need to make sure that you understand the panel, you understand how the stock is trading and moving, what it all means when you are looking at the quote window.
Once you have those things in place just put on a few system testing trades. The reason for this is to see if you would be profitable or not. If you are not profitable with a fake system one that you can get in and out of any time with no pressure and no emotions than it makes it much more difficult to be profitable with real money.
It does not mean that when real money is on the table you are going to be much better, it just means that things are a little more emotional and a little more difficult. So having a system that you have tested and proven over time will give you more confidence to ensure that it is working.
Testing a system
There are many different ways to test a system, one of my favorite ways it to just take a regular notebook, write down how many shares you have, write down how many shares you would purchase on a certain date, what your commission rate would be, what the quote of the stock is and the stock you are purchasing, and just watch it. You should watch it for multiple weeks, months, or years.
#tradingstrategy #tradingsmart #backtesttrading #testingstocks #stockstrategy
Posted at: https://tradersfly.com/blog/back-test-your-stock-trading-strategy-system/
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