The Proof I Seek is Found in the Trades I Make

July 17, 2020

No way of thinking or doing, however ancient, can be trusted without proof.

~ Henry David Thoreau, Walden

Simulated Trading.

Backtesting.

Forward Testing.

Optimizing.

All of these steps, and more, are vitally important to any aspiring systems or algorithmic Trader. Creating a strategy out of thin air or on a whim and then just sending it into the wild to be traded live, either manually or machine-assisted is likely to result in frustration. I know, because I’ve done it.

I’m not advocating for skipping these steps. They are important and valuable time spent.

But eventually, I need proof. Real proof.

And the only way I know how to get real proof is to just bite the bullet and get started. It’s only when I get started for real that I discover all the things I still need to address to get the strategy where I need it to be. Of course, it often becomes the perfect example of Murphy’s Law — everything that can go wrong will go wrong. And in my case, its seems to always happen nearly immediately! LOL.

But this is actually a good thing. Fail fast, as Phil Knight wrote in Shoe Dog. Of course, the key to making these fast failures constructive and not destructive is to trade small. When in doubt, always go smaller.

My P&L and equity curve is an unemotional reporter, simply stating facts not slanted by any political agenda. The proof I seek will be found in the trades I make.