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Advanced17 papers85 minCertificate$13

Building and Proving a Strategy

Write the rules down, test them on history, and then spend the rest of the course trying to prove yourself wrong — which is the only test that counts.

Who it is for
A reader with an idea they believe in and no way to check it.
Before you start
Twelve Strategies, on the Chart, and The Autopsy.
Start the courseBuy this course — $13

Opens with Premium, or buy the course on its own.

You will be able to

  • Write a strategy down so that another person could follow it exactly
  • Backtest it by hand, and in the Strategy Tester, and say why the two differ
  • Recognise curve fitting in your own results
  • Hold back data, and test on what you have not looked at
  • Say how spread and slippage change a backtest's result
  • State in advance the condition that would make you stop trading it

17 papers

A short quiz after every paper; the next paper opens when you pass it.

  1. Unit 1

    Writing it down

    1. 01How to Write Down a Strategy5 min
    2. 02How to Add a Filter to a Strategy5 min
    3. 03How to Write Down a Test First5 min
    4. 04What Is a Trading Edge5 min

  2. Unit 2

    Testing it

    1. 05What Is Backtesting5 min
    2. 06How to Backtest a Strategy by Hand5 min
    3. 07How to Backtest in the MetaTrader Strategy Tester5 min
    4. 08What Is Forward Testing5 min
    5. 09What Is Paper Trading5 min

  3. Unit 3

    Trying to break it

    1. 10How to Spot Curve Fitting5 min
    2. 11What Is Overfitting, in Plain Words5 min
    3. 12What Is Out-of-Sample Testing5 min
    4. 13What Is Look-Ahead Bias5 min
    5. 14How Spread and Slippage Change a Backtest5 min

  4. Unit 4

    Keeping it honest

    1. 15What Is Walk-Forward Testing5 min
    2. 16How to Keep a Strategy Scorecard5 min
    3. 17When to Stop Trading a Strategy5 min