It has been previously stated that creating automated trading software is a straightforward task. However, developing profitable software that also mitigates risk to a manageable and sustainable level is challenging and requires expertise.
Utilizing back testing is crucial for evaluating the potential success of a strategy, but caution must be exercised. 'Curve fitting' involves optimizing the software to perform flawlessly within a specific timeframe, a common error in strategy development that neglects unpredictable market conditions.
To enhance the resilience of our software, we implement an extensive back testing process.
We test across various timeframes.
We adjust parameters slightly to ensure the strategy's strength.
We use high-quality tick data for realistic outcomes.
We test on two different platforms for consistency.
And more...
Despite this, it's important to note that back testing doesn't guarantee future performance. Nevertheless, we strive to maximize the likelihood of achieving similar results, believing it to be a key factor in our success.
