Do You Want to Become a Better Trader?What if you could become a better trader

Excel Course – “How to Backtest a Trading Strategy Using Excel”

In response to the feedback I have received from the videos I have created a course. The course is in the form of an Amazon Kindle ebook.

If you follow this course you will:

Improve your Excel skillsBuild a Long-Only Backtest Model Build a more advanced Long-Short Backtest Model Learn How to Optimise your Trading Strategy Tips for Improving Your Backtesting Skills

The backtest models in this course can be applied to any market

2 THOUGHTS ON “HOW TO BECOME A BETTER TRADER – BACKTEST YOUR OWN TRADING SYSTEMS”

Analysis

To understand which method is best I have carried out an analysis to compare buy-and-hold with three different hedging strategies. I want to understand whether we should be hedging and if so, which is the best way to hedge.

Market

This is a long-term analysis, and I have included reinvested dividends.

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Method

I have used Backtest Model. This model has been specifically set up to test hedging strategies. Backtest Models can make your trading life easier and more profitable

Hedging Strategies

Buy and Hold

Buy at the beginning of the period and hold until the end.

Sell below the 200 period EMA

Hedge or sell out of portfolio when the price is below the 200 EMA.

Golden Cross

Hedge or sell out of portfolio when the 50-period EMA falls below the 200-period

Linear Regression

Hedge or sell out of portfolio when the 200-period linear regression is pointing downwards

Conclusion

The results above strongly suggest that it is a good idea to hedge your portfolio during a market crash. The results show that it is better to invested in the market during most periods. However, when a serious market crash arrives, it is better to be out of the market.