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Backtest before going live, guys

  • #1
  • First Post: Feb 27, 2026 7:05am Feb 27, 2026 7:05am
Let me ask you something honestly.

Why are you allowed to drive a car on public roads? Because you have a driver’s license, right?

And that license didn’t come from confidence or motivation. It came from hours of frustrating practice - stalling the engine, making mistakes, almost crashing - not from jumping straight into traffic on day one. Yet somehow, in trading, people do exactly that. Before talking about risk management or trading psychology, pause for a moment and backtest your strategy.

Backtesting is where you find your edge. More importantly, it’s where you save yourself from burning real money. Don’t just watch one YouTube video about a “profitable strategy” or a shiny new indicator and immediately trade it live. Spend time backtesting it.

You will either: Truly understand how it works and gain real confidence, or Realize it’s complete garbage and walk away Both outcomes will save you money. Please, be honest with yourself. Stop throwing money out the window.

I wish someone had told me this clearly.
My first year in trading, I ignored backtesting - and I paid for that mistake with real money, real frustration, and wasted time.
Learn from my loss.

Backtest first.
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  • #2
  • Feb 27, 2026 8:57am Feb 27, 2026 8:57am
In trading we can mostly harm ourselves. In traffic we can harm others.
Sadly most don't learn from others mistakes.

We all know TOP 3 mistakes that trades make:

1) moving stop away from price again and again till we can't take that pain anymore and close position at worst possible location.
2) adding multiple times to the loser will we get margin called.
3) moving target closer and closer, begging with market, give me out at least break even.

We all know what not to do but we still do it 100s of times before we get sick of it and finally stop repeating basic mistakes.
I might be wrong , I have been wrong before
  • #3
  • Feb 27, 2026 9:27pm Feb 27, 2026 9:27pm
Quoting Mandariin
In trading we can mostly harm ourselves. In traffic we can harm others. Sadly most don't learn from others mistakes. We all know TOP 3 mistakes that trades make: 1) moving stop away from price again and again till we can't take that pain anymore and close position at worst possible location. 2) adding multiple times to the loser will we get margin called. 3) moving target closer and closer, begging with market, give me out at least break even. We all know what not to do but we still do it 100s of times before we get sick of it and finally stop repeating...
What you mentioned is more related to psychology than to strategy. Psychology is step two in the trading journey; step one is having a proven edge.
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  • #4
  • Feb 27, 2026 10:06pm Feb 27, 2026 10:06pm
Quoting nguyenduy747
{quote} What you mentioned is more related to psychology than to strategy. Psychology is step two in the trading journey; step one is having a proven edge.
If have a edge and plan you will make zero mistakes ?
My point was people don't lean others mistakes.
I might be wrong , I have been wrong before
  • #5
  • Feb 28, 2026 11:16am Feb 28, 2026 11:16am
Quoting nguyenduy747
//Backtesting is where you find your edge. ///Backtest first.
IMHO, only forward-testing a strategy in live, real-time market will help you develop your winning edge.

Attached Image (click to enlarge)
Click to Enlarge Name: Mental Edge in Trading by Jason Williams2.png Size: 260 KB

Back-testing allows you to test a strategy using historical market data.

...
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #6
  • Feb 28, 2026 2:15pm Feb 28, 2026 2:15pm
Quoting emmanuel7788
{quote} IMHO, only forward-testing a strategy in live, real-time market will help you develop your winning edge. {image} Back-testing allows you to test a strategy using historical market data. ...
Any differences from forward testing on historical data (what people often call backtesting) from 'forward testing' real time?
Air force
  • #7
  • Feb 28, 2026 3:31pm Feb 28, 2026 3:31pm
1. Demo Trade and blow up 10 - 20 accounts min..
2. Trade micro lots on live account and probably blow that up too.
3. Take a break, study, study and realise you over complicated the shit out of everything and indicators are not needed.
4. DEMO again with new found knowledge and emotions far more under control. ( Fear and greed )
5. New live account with micro lots again.. Start to get consistant..
6. Slowly increase lots, trade less and make more.......
Im only here for the Guzzoline...
  • #8
  • Feb 28, 2026 7:13pm Feb 28, 2026 7:13pm
Quoting TheCableman
1. Demo Trade and blow up 10 - 20 accounts min.. 2. Trade micro lots on live account and probably blow that up too. 3. Take a break, study, study and realise you over complicated the shit out of everything and indicators are not needed. 4. DEMO again with new found knowledge and emotions far more under control. ( Fear and greed ) 5. New live account with micro lots again.. Start to get consistant.. 6. Slowly increase lots, trade less and make more.......
almost all real trader have this path, many trader stuck on step 2 as you said
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  • #9
  • Feb 28, 2026 8:59pm Feb 28, 2026 8:59pm
Quoting nguyenduy747
{quote} almost all real trader have this path, many trader stuck on step 2 as you said
you do not need to become stuck on step 2.

What are your objectives in your back-testing using past historical price data ?
Were all your objectives met knowing your back-testing results ?
etc. etc. etc.

below is an example I have done back-testing on DE40.
same trading hours time-of-day and same setup for entry and exit and risk-to-reward 1to5.
I know the Win Rate based on past historical data and I am happy with it.
I know the consecutive wins and losses from this back-test and I will be psychologically prepared for this.
I know the %Risk $amount per trade and the Position Size to be calculated from the risk in pips. I will be DISCIPLINED in Position Sizing and will manage my trades exit strategy using R-Multiple management.

Attached Image (click to enlarge)
Click to Enlarge Name: DE40 DailyEA 2020 to Feb242026 1-3-2026 12-45-10 pm.png Size: 9 KB

Next, I will forward test this same entry and exit from Monday March 02, 2026
...
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #10
  • Feb 28, 2026 9:02pm Feb 28, 2026 9:02pm
Quoting emmanuel7788
{quote} IMHO, only forward-testing a strategy in live, real-time market will help you develop your winning edge. {image} Back-testing allows you to test a strategy using historical market data. ...
Forward testing is necessary but so is backtesting.

I'm not sure if you are making the argument that backtesting is useless or not, but many do and it's just such a ridiculously wrong argument.

Generally people say that backtesting is useless because it doesn't account for seeing the setup in real time, as well as the psychological aspect of trading, which is true but just because it doesn't do everything doesn't mean it's not useful.

It's analogous to work on the training pitch vs playing a match in a sport.
No-one would argue that you can get everything from training, but those that don't train are not going to be prepared when it comes to the match.

Many people that put down backtesting are simply lazy because it's a huge amount of time and effort when done correctly, and most people are simply not willing to put in the work.
NinjaTrader/cTrader Coder, @backtested on telegram
  • #11
  • Feb 28, 2026 9:38pm Feb 28, 2026 9:38pm
Quoting backtested.
{quote} Forward testing is necessary but so is backtesting. I'm not sure if you are making the argument that backtesting is useless or not, but many do and it's just such a ridiculously wrong argument. Generally people say that backtesting is useless because it doesn't account for seeing the setup in real time, as well as the psychological aspect of trading, which is true but just because it doesn't do everything doesn't mean it's not useful. It's analogous to work on the training pitch vs playing a match in a sport. No-one would argue that you...

NO. I am saying back-testing using historical price data is an important part of and a process when we do our trading system development.

It is what we do after knowing the back-testing results that matters.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #12
  • Feb 28, 2026 10:42pm Feb 28, 2026 10:42pm
Quoting emmanuel7788
{quote} NO. I am saying back-testing using historical price data is an important part of and a process when we do our trading system development. It is what we do after knowing the back-testing results that matters.
Fair enough, seems like we agree for the most part.
Good luck on your upcoming forward test.
NinjaTrader/cTrader Coder, @backtested on telegram
  • #13
  • Mar 1, 2026 4:27pm Mar 1, 2026 4:27pm
Quoting emmanuel7788
{quote} you do not need to become stuck on step 2. What are your objectives in your back-testing using past historical price data ? Were all your objectives met knowing your back-testing results ? etc. etc. etc. below is an example I have done back-testing on DE40. same trading hours time-of-day and same setup for entry and exit and risk-to-reward 1to5. I know the Win Rate based on past historical data and I am happy with it. I know the consecutive wins and losses from this back-test and I will be psychologically prepared for this. I know the %Risk...
This is actually a good sign. Doing solid historical back-testing helps you build strong strategy setups and confidence.
A lot of people misunderstand the purpose of back-testing. They think that after a few winning trades, they’re ready to go live. But back-testing should be treated as if you’re trading real money, so you can learn from it and extract real experience, not just results.

Another important point is that market regimes are always changing. We need to adapt to those changes. So if a strategy stops performing well, it’s necessary to back-test again to fine-tune the strategy or even develop a new one if needed.
BTC/USD
  • #14
  • Mar 1, 2026 4:34pm Mar 1, 2026 4:34pm
Quoting emmanuel7788
{quote} NO. I am saying back-testing using historical price data is an important part of and a process when we do our trading system development. It is what we do after knowing the back-testing results that matters.
I agree. After getting the back-testing results, the real battle is the psychological one.
That’s a big challenge because we’re human, not machines.
Position sizing per setup is also very important. I’ll probably go into more detail about that in a separate post.
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  • #15
  • Mar 1, 2026 11:09pm Mar 1, 2026 11:09pm
Quoting W0lfram
{quote} Any differences from forward testing on historical data (what people often call backtesting) from 'forward testing' real time?
This is real-time live trading forward-testing

DE40 Mar02 London 6am

Attached Image (click to enlarge)
Click to Enlarge Name: DE40 2-3-2026 2-44-13 pm.png Size: 13 KB



Back-testing using historical price data:
DE40 Risk-to-Reward 1 to3

Attached Image (click to enlarge)
Click to Enlarge Name: DE40 RR 1to3 1-3-2026 1-04-10 pm.png Size: 10 KB


...
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #16
  • Mar 1, 2026 11:27pm Mar 1, 2026 11:27pm
Hello, , Please, can I get the .ex5 file?
  • #17
  • Mar 2, 2026 5:40am Mar 2, 2026 5:40am
Quoting emmanuel7788
{quote} This is real-time live trading forward-testing DE40 Mar02 London 6am {image} Back-testing using historical price data: DE40 Risk-to-Reward 1 to3 {image} ...
DE40 Mar02 trade closed

+3R profit

Attached Image (click to enlarge)
Click to Enlarge Name: DE40 Mar02 trade closed EP SL TP3 2-3-2026 4-16-26 pm.png Size: 17 KB


Attached Image (click to enlarge)
Click to Enlarge Name: tempFileForShare_20260302-162243 DE40 1 trades closed.png Size: 41 KB





...
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #18
  • Mar 12, 2026 12:06pm Mar 12, 2026 12:06pm
I agree with the title name.
A few pointers.
Back-testing is a lot of work, and require a lot of "Back-testing knowledge"
Back-testing can not be done for strategies that use discretion/intuition, etc.

Once you get an idea, make it an strategy by setting strict rules for entries, exits, etc.
Once you have the rules, code it (or have someone to do it) ,
Run the code in a demo account and check if it is doing according to your idea/rules.
Then back test at least 5 years ( jan 1-dec 31) with the same settings .
Do not tweak much the settings. You do not want to fall into curve fitting.
If you have profits all 5 years, small or big, Only then you know you have an edge.
Try is a small account, low leverage in case of unforeseen events
Now, you have a code that will trade for you. No emotions.
  • #19
  • Mar 13, 2026 2:36am Mar 13, 2026 2:36am
Quoting jeuro2.0
I agree with the title name. A few pointers. Back-testing is a lot of work, and require a lot of "Back-testing knowledge" Back-testing can not be done for strategies that use discretion/intuition, etc. Once you get an idea, make it an strategy by setting strict rules for entries, exits, etc. Once you have the rules, code it (or have someone to do it) , Run the code in a demo account and check if it is doing according to your idea/rules. Then back test at least 5 years ( jan 1-dec 31) with the same settings . Do not tweak much the settings. You do...
I agree. But the reality is that many traders would rather risk their account and keep trading instead of spending time doing proper back-testing. It’s kind of ironic.
BTC/USD
  • #20
  • Mar 13, 2026 4:30am Mar 13, 2026 4:30am
Yes. It is a sad reality.
It is not a surprise that most lose.
On top, most, do not know how the forex market works.
Eternally looking for the "magic indicator" or following non sense strategies.
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