What is Backtesting? (Part I)

By Ahmad Hassam

With Backtesting, traders can actually test their trading strategies and how well they would have done if executed in the past. Backtesting any trading strategy allows a trader to simulate its expected performance using historical price data.

What type of a trading strategy can be backtested? Any trading strategy that does not have any ambiguity in its rules can be backtested effectively. Example of a simple trading strategy that can be backtested can be as follows.

When the MACD histogram has crossed above the zero line and the DMI+ is above DMI-, go long when the 5 period moving average has crossed above the 20 period moving averages.

When the MACD histogram has crossed below the zero line and DMI- is above DMI+, sell short when the 5 period moving averages has crossed below the 20 period moving average.

Are backtested trading systems reliable? Why so much backtested performance is quoted on the websites to prove that the trading system is good? You must know that using the past price data to simulate future results often misleads traders into thinking that their backtested results will also give into similar results in actual real time trading. This one example is just meant to illustrate that any trading strategy having clear cut rules can be backtested with the historical data.

There is much difference between live trading performance and the backtested trading performance. Many potential factors can and will make hypothetical performance and actual performance differ significantly. So you should not fall into the trap of thinking that Backtesting may be a perfect method for identifying the most profitable trading strategies.

Market fundamentals keep on changing. This makes a trading strategy that may have worked very well over the past three years work in an entirely different manner for the next three years as the market changes and evolves. One of the most important facts that you should always keep in your mind is that market changes considerably overtime.

Do you know that often technical indicators that have been giving profitable signals in the past are subsequently unable to replicate their performance in the future? This may frustrate you. But this is exactly what makes trading a challenging endeavor.

Secondly in term of trade execution, a trading strategy in real time may be much different from the way the trading strategy behaves on Backtesting. These differences can potentially skew the results.

Backtesting can provide a trader with a reasonable expectation of the trading strategy's potential worth and usefulness. However, Backtesting is still the best available method for evaluating a trading strategy without actually trading it in real time environment.

Backtesting can be done by using two methods. The first one is the automated Backtesting. This is the most popular method. Automated Backtesting entails using a specialized program. The trader inputs the specific rules and criteria for the trading strategy into the Backtesting program.

The software than automatically applies those rules to the past price data and tallies the past hypothetical profits, losses and other information. An entire picture of the past performance is created. - 23199

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. Try This Cash Printing Forex Signal Service From Heaven! First practice on your Forex Demo Account!

The Denver Condominiums Real Estate Market

By Michael Canon

Denver condominiums have a lot to offer residents and are often preferred over houses. Living in a condo has unique benefits just as living in a house does. Many residents prefer to live in houses however residents that live in condos have a unique chance to experience Denver in a way that home owners cannot. The main reason for this is because the various locations of the condos throughout the city.

Denver condominiums range in location from downtown Denver to the suburbs. Many of the condos that are located near downtown are old factories that have been refurbished to be condos. Downtown Denver condominiums also house upscale high rise condos on top of the older buildings that have been refurbished. While many of these high rise condos are occupied by wealthy residents, there are many other condos in the area that are just as appeasing.

Another huge advantage of living in a Denver condominium is that most of the time you will not have to worry about the lawn care aspect as you would if you owned your own home. This allows you to own a place and still have certain benefits that apartments have.

Buying a condo is similar to buying a house as it is a large decision and commitment. Many Denver condominiums have swimming pools and fitness centers that you can use which home owners do not get the advantage of unless they buy the equipment themselves. Usually a condo in Denver will cost about $170,000 however they can get as high as $1 million in some of the high rise downtown Denver condominiums. The average for monthly condo payments ranges between $800 and $1,500 depending on how much the condo is.

Inside Denver you will find that there are three main types of condos. The most popular type of condo that you will find in the area are the lofts which many students stay in. In most cases the lofts are remodeled buildings that are located near the downtown area. The second type of condo that you will find is a vacation condo. These condos are usually around the edges of the city and have attractive mountain views and are close to outdoor activities. The third and final type of condo in the Denver area are the high rise condos located in downtown. The high rise condos usually have many different features and extras that are included with the condo.

With there being so many Denver condominiums you might be wondering how you will be able to find and choose one that fits your living style. Finding a condo that you like is made easy by touring them. Not only will you be able to find a condo that fits your price range but you will also be able to find a condo that has the features you want.

Many Denver condominiums go fast as they are in high demand. You will want to take your time while looking for a condo in Denver so that you choose the right one for your way of life. Vacation condos should be chosen based on what attractions you will be visiting such as if you are planning on going on the Denver Microbrew Tour. - 23199

About the Author:

Rodolfo Canon is a Denver realtor with the Canon Colorado Team who are frequently quoted by the Denver Media as real estate experts. Rodolfo can help you find Denver condominiums or lofts that you're looking for. Make contact today by visiting them at Denver Condominiums or Denver Real Estate!

What Is An Online Forex Trading System?

By John Eather

What is an online Forex trading system? First off, Forex, Foreign Exchange or FX are all used to when describing the trade of currencies throughout the world. It is the biggest market out there with trades exceeding 3 trillion dollars a day. This type of trading is on done on the hopes of making a profit. A trading system allows you to trade these currencies over the internet.

Unlike the stock market, you have access to trading 24 hours a day seven days a week. Because there is always someone to trade with, you have superior liquidity.

There are several do's and don'ts in Forex trading. What are they? Well, pay close attention. These tips could save you some trouble.

There are automatic trading robots available for you to use. Don't use them. They trade based on previous information which will not help you. If they did work well, then everyone would use them for trading.

Prepare yourself for the fact that you will suffer some losses sometimes. The sooner you realize this, the better off you will be. Don't guess at what the currency is going to do. This is impossible to know. Perform your trades by minimizing the risk to you.

Do not follow the lights. Think through your decisions to buy or sell. Don't rely on a green light or red light to make those decisions for you.

About your broker, they are salespersons, the more you trade, the more money they make.. In Forex trading this is known as the spread. Don't believe that they don't earn a commission. The spread and commission are one in the same.

You have a life away from the computer so make sure you take time to enjoy it. If you spend more than 20 minutes a day trading, you are going to start doubting yourself and possibly suffer burn out. This can cost you dearly. So, make sure to spend time with family and friends as well.

Don't wait for someone to tell you that the economy is okay before you start trading. This has nothing to do with currency trading or your earning potential with Forex. Becoming a successful trader by following certain rules, you learn that you control the risks you take. When you are in control, the earning potential is there regardless of the market. - 23199

About the Author:

Want to find out more about online forex trading system, then visit John Eather's site on how to choose the best forex trading robot for your needs.

Most Common Topics In A Penny Stock Forum

By Malcolm Torren

Today, no matter what field or business you are engaged in, an online community out there is always available to support you. If you are into the business of small caps and penny stock investment, then a penny stock forum is the right venue for you to address you concerns to. Of course you cannot discount the advantages of learning from dedicated blogs for penny stocks. Websites that give focus in this trade have useful information too. But a stock market forum involves people who are actually online real time.

Online, you will be able to see who is currently logged in, who is joining in what thread or topic, and how many members there are in the forum. The information exchange is real. It's live. It's like talking to people and sharing your views about penny stocks. They in return share their opinions. You also get stock price recommendations. It's like going to a stock market online party where all that people talk about is stocks, stocks, and stocks. Of course why not?

This article will list down some of the most common topics created in a penny stock forum. If you are a new investor in stock market, it will be easier for you to look for these titles (or something that is close to it).

1. Questions on penny stock trading. All questions about penny stock trading is posted here. Apparently, this forum thread is usually created for open discussions about general penny stock information and the business.

2. Stock charts. Well you know what a stock chart is. If you don't, either read more about it or join this thread. This category talks about technical indicators and trends using charts.

3. Penny stock trading software. This thread is dedicated to new softwares, trading platforms, operating systems, and other technical software stuff you could find in the internet about small cap investment today.

4. Trading stations. This topic can vary depending on the topic starter. One penny stock forum would start this topic by asking you your top ten trading stations.

5. Momentum of penny stock picks. Day traders know what this means. This is a thread that should have a lead on day trading.

6. Ticker symbols. There are new companies coming in every now and then and ticker symbols are always required. If you want to check on ticker symbols of companies used in the stock market, look for this thread.

7. Forex topics. Well as the title implies, it's about foreign stocks in the stock market. Of course expect to find foreign currencies here.

8. Day traders and stock option traders. Either it's about momentum stocks or day trading and stock options, these special fields in penny stock trading also deserves a rank in the top-ten list in this penny stock forum article.

9. Stock market education. This is also another term commonly used in most popular penny stock websites for free stock market education. Unlike static webpages, people get to interact with you when you have questions.

10. Canadian stocks sold. Again as the title suggests, it's about Canadian stocks. That shouldn't be difficult, right?

The good thing about a penny stock forum is that you can discuss your questions, share opinions and share your success in the trade with others who are just as eager. And you'll be surprised that people would share back. It's a never ending discussion of ideas and even jokes. You meet new friends online. And best of all you also earn. - 23199

About the Author:

Learn how to get crucial penny stock pick from a penny stock forum. Check out forums now.

Overview Of The Currency Trading Markets

By Rueben Gomez

The buying and selling of currencies on the foreign exchange market is what is commonly established as currency trading. To those that have never traded currencies, forex trading may seem daunting. Fortunately, forex trading is a straightforward procedure with mechanics that are effortlessly understood.

The foreign exchange market is the worlds largest trading market. Everyday, 2 trillion dollars in trades are made in this market.

Smaller networks of currency markets join to make up the forex market. It is built to deal with all currencies globally. There are a assortment of trading platforms that one can utilize.

A true 24 hour market, trades can be made at any time appropriate to your needs. Although it should be noted that trading is not permissible on Saturdays and Sundays.

Domestic political and economic factors greatly affect the value of a country's currency. Major world currencies such as the British pound, the Euro and the Australian and New Zealand dollar all enjoy high trade volume due to the relative stability of the respective countries.

Selling high while buying low is the key to making profits in this market. The kind of trades taken also differ depending on the specialty of the trader. Many traders get pleasure from the high risk strategy of scalping the market while others prefer to lay back and relax with long term trades.

There is a lot of money to made in the forex market. Leverages of up to 250:1 are enjoyed through their forex brokers. Leverages are important because they influence how much a trader can borrow when opening a trade.

The forex market can be very fickle. Due to its volatility, huge profits as well as losses are achievable over a short time span. Traders pay what is known as the spread each time they open a long or short trade. The currency pair is the determining factor in the spread paid. Highly unpredictable currencies usually have higher spreads and vice versa.

The downside of currency trading has to do with the high risks involved. There are several trading strategies and money management techniques one can use to minimize these risks. To fully comprehend the personality of the currency market, extensive trading on free demo accounts are needed. - 23199

About the Author:

Global Forex and Investments make up two of the major areas that the writer is dedicated in. Rueben Gomez is a Stock and Currency Trader with years of experience in this fields. When he is not trading, he operates an online forex portal.