What if I told you that you could improve your trading results by simply clicking your mouse a few hundred times?

 

Most people would agree, but few actually follow through, and that’s something I don’t understand. In this video, we’ll discuss what I believe is the single most important step to enhance your trading results—backtesting. Many avoid this because they think it’s a waste of time, but it’s crucial. You can see in this example, I’ve been backtesting since 2014. Here, you’ll notice a current backtest that has been running for 32 minutes. This is one of hundreds of backtests I’ve performed over the years.

People often give up after a handful of backtests—5, 21, or 37—and conclude that trading doesn’t work because they hit a large drawdown. But that’s where they go wrong. I’ve continued running backtests for a decade, and while there have been drawdowns, I’ve never encountered one that would endanger my account. Some might argue that a 30% profit isn’t enough, but the key lies in consistency over time.

Take this backtest, for example…

 

Starting with $10,000, the profit is around $3,300. Now, I’ll show another test on a different system that began with $1,000 and made $4,083 by September 12, 2024. The results may seem modest, but remember: it’s about iteration. You need to let your computer run hundreds of backtests, make one small change, and then run hundreds more. This process refines your system.

To illustrate, my current system has a profit factor of over 2.0, with a drawdown of $422 and a profit nearly 8.5 times higher. If you want similar results, whether with larger or smaller accounts, you just need to keep backtesting. Repeating this process over time allows you to refine and improve your strategy.

Despite this, many traders are reluctant to do it. They avoid demo or cent accounts, thinking it’s a waste of time. Some even believe stop-loss strategies alone will save them from big losses. But the truth is, to build a resilient system, you need to backtest consistently—whether for one year or, like in my case, for ten years. Only then will you have a solid foundation to build upon and improve.

So, that’s it for today’s video. I hope I’ve convinced you to take backtesting seriously. Do it over and over again until you feel confident in your strategy. If you found this overwhelming or need more guidance, you might want to explore our premium course on the website for a more in-depth explanation. Thanks for watching, and I’ll see you in the next video!