Forex Backtesting: How To Use The Trend To Get Better Trades

In this Forex trading vlog, I share a quick backtesting tip I was given on how to use the trend in a Forex backtesting. Vlog #223

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I Believe That Context Is Important In Trading…

Simply said, I believe that context is important when trading the Forex market. I will never apply a set of tools (i.e. indicators) until I know what phase the market is in.

While understanding the phase of the market is pretty simple when looking at the chart, it gets tougher when coding a script that will be run automatically to backtest a trading strategy.

Being Around Traders Helps…

I gave a call to my friend Houston Truong last week, who recommended looking at the order of moving averages on various timeframes. That is something I hadn't thought about.

The cool thing about this method is that it allows putting a certain weight on the trend on various timeframes. As a matter of fact, a trend on the weekly chart might be more significant than a trend on the daily chart for instance.

While a lot of work remains on that topic, I simply wanted to share the idea with you and I hope it can be beneficial if you are at the stage of backtesting a trading strategy (whether that's your first strategy or an improved version).

Have you ever used the trend in a Forex backtesting? What was your experience? Comment below and we'll chat!

If you are aspiring to trade for other people while traveling, you might want to consider checking out the Desire To TRADE Academy where I’ll help you do precisely that!

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