Mini I.B. vs 7am-9am Breakout?

I have been a member of mypivots for a little over a year now, using the posts as a springboard for learning about the futures and currency markets – I’ve really appreciated the research and insight of so many of the contributors.

I’m now at the point where I’d like to begin systematically back testing one or two strategies for potential trading. I like the concept of breakouts (just finished Fisher, currently reading Crabel) – Charter Joe's Mini I.B. and 7am-9am GBP/USD Breakout threads are especially interesting in this regard.

I’d appreciate some advice from the folks here. The IB and 7-9 threads are now over a year old: do both concepts still perform reasonably well in live trading? If so, which of these would you recommend that I begin my back testing with:

1. The 30B
2. The 5B
3. The 7-9 currency breakout

I have a full time job so I need a scheduled window of time to trade in. I plan to trade single lots, primarily intraday. I am methodical by nature and prefer smaller, steady gains to wild gains… and wild losses.

Any thoughts gratefully received! Thanks.

Isaac

I have heard “back testing” any strategy will give you incorrect results You have to forward test it if you can

Originally posted by khamore1

I have heard “back testing” any strategy will give you incorrect results You have to forward test it if you can

Depending on how you back test you can get very accurate results. For example, if you are conservative in your back testing and assume that the price has to trade at least 1 tick through your limit orders then that will produce accurate results. Also if you are a 1 lot like Isaac then your action in the market will not have a measurable effect.

I assume that "forward testing" is using a simulator to run a potential strategy in real time? Even after the sim is set to "conservative fills" you only get one shot each trading period with each strategy. It seems that you could end up spending your entire life testing - rather than trading (my problem will be knowing when to stop testing and to actually launch out into the trade waters
.)

Granted, it sure is tempting to look at past action through rose-colored glasses. I imagine it becomes really difficult when you are trading multiple lots and then trying to estimate if price moved far enough, for long enough, with sufficient volume to actually work out.