One group that tests trading systems is Futures Truth. It is run by long time industry veteran John Hill:
John R. Hill is President and founder of Futures Truth Magazine. Futures Truth Company was established to bring truth to the world of publicly offered trading systems. The public is literally flooded with trading systems which carry promise of great wealth. If one only has the discipline to "follow the system". Many traders have purchased systems for large sums of money only to find out later that the system is worthless. Our purpose is to provide information to assist you in both the purchasing of and the actual decision to trade a system. It is up to you to reach your own conclusion from the facts we present.
5 Questions to Answer
A trading system must answer the following 5 questions (from book Trend Following):
- How do you determine what market to buy or sell at any time?
- How much of a market do you buy or sell at any time?
- How do you determine when you buy or sell a market?
- How do you determine when you get out of a losing position?
- How do you determine when you get out of a winning position?
Summary
Using money management in system testing is critical. More on Indicators.
