BUILDING A SIMPLE TOOL TO VERIFY TRADING STRATEGIES, EVEN A KID CAN DO IT!
Tom is one of my long-lost
schoolmates. He has read many stock trading books, heard thousands of stock
trading aces’ stories, and learned a lot of stock trading strategies. He can
recognize dozens of candlestick patterns, if not hundreds. Tom is a quick
learner and very smart. He figured out some new trading strategies, and
every strategy looked perfectly profitable. But when he tried to deploy
these promising strategies to trade stocks, the results always disappointed
One day, Tom met me at another schoolmate’s wedding, and I heard
his story about stock trading. I asked him, "Did you run any backtesting for
your trading strategies?"
Tom was surprised, "What the heck is
I was also surprised and said, "Then you must have ignored
forward testing too, eh?"
Tom did not know the Forward Testing thing
either. He complained that his father had asked him to study international
relations instead of computer software, which caused him to know nothing
about programming. After blaming everybody, Tom blamed me too, "And you,
mate, you even refused to let me copy your coding homework in school. Now
what have you got to say for yourself?"
My face was red, "Well, Tom, give
me a chance to make it up, OK? I will write a small program for you. It can
help you screen out those bad strategies, and you can adjust and modify it
to create your unique strategies that really work."
"Sounds good, but I know nothing about programming. Those C, R, Java,
Python, MATLAB always give me a headache."
I held his shoulder, "Forget
those big brothers. If you are using Excel, as I'm sure you do, you can deal
with a very easy coding thing, VBA."
"What does VBA mean?"
"Eh, a Very
Basic Art. Just kidding. Don't be scared. It is really BASIC. If you can
operate a smartphone, then you can deal with VBA. See? IF what what what,
THEN what what what. That is VBA's language, just like using plain English
to give a computer some instructions."
After a moment of hesitation, Tom
finally agreed to give VBA a try. He spent countless hours experimenting
with different parameters, testing various strategies, and analyzing the
results. And you know what? He even went on to teach his father a thing or
two about trading and investing.
And as for me, well, Tom's happiness
made me feel proud and relieved at the same time. I had finally made it up
to him for not letting him copy my coding homework in school.
a trading strategy is only the first step towards achieving success in the
financial markets. The next step is to verify if the strategy is profitable
or not. This is where backtesting comes in. Backtesting is the process of
applying a trading strategy to historical market data to see how it would
have performed in the past. By doing this, you can get a good idea of
whether the strategy has the potential to make money in the future. Always
backtest your trading strategies before putting your money on the line. And
if you're struggling to do it yourself, just remember: VBA is your friend.
Now that Very Basic Art is here. And I hope you can like it just like Tom
In this handbook, we will walk you through the process of building a simple tool to verify your trading strategies' effectiveness, even if you don't have strong programming skills. All you need is basic knowledge of Excel and VBA (Visual Basic for Applications). We will use these tools to create a backtesting spreadsheet that you can use to test your trading strategies. This method and tool can be applied not only to stock trading but also to other financial instruments such as Forex (foreign exchange), Options, Futures, Cryptocurrencies, and Bonds, among others.
In short, no guesswork since today! Building a simple tool by
an easy method, you would be trading based on solid evidence. What are the
odds of gaining profit, or hurting by loss, let data talk!
LIGHTING THE PATH TO PROFITABLE TRADING
(the whole tutorial handbook pdf Free Download)
A Step-by-Step Guide to Building a Trading
Strategy Verification Tool with VBA Macros