THIS is Why You Should Always Check Your Automated Strategies With A Small, But Real Money Account!

by Mark Williams on May 26, 2009

So, Today I loaded up a new strategy that I had tested, optimized, threw everything that I had at, and more, out into the real world for the first time.

MY little baby.

Anyway, let this be a lesson to all ye out there: Always test your code for automated strategies on small money accounts.

My strategy was one that traded the FOREX market, so testing it on a small account that I created just for testing, was no big issue (only $100 total at risk in this micro-lot account).

Well…the trading portion of the code worked FLAWLESSLY (ended up with a loss for the day, but based on my trading parameter is did everything that I wanted to). I am still letting it run free-range for the next month or so just to make sure no other bugs are in the code.

Well Mark, if the trading portion of the code worked correctly, why are you even talking about this?

Well, the trading portion did work correctly.

The trade notification code DID NOT.

By placing the wrong function in the wrong place, instead of the code notifiyinh me whenever I got into and out of a position, it notified me whenever my trade parameters were hit — even when I was already in a position.

Example:  If I was Long due to hitting a set-point, I would get into the trade. However, once in the trade, you set-point could technically continue to be hit, but since you are already long, it does not matter.

However, my trade notification function was not keyed into when I got into the trade, like it wanted it to, it was keyed into whenever ANY possible trade set-points were hit.

It is a good thing that I have an unlimited text messaging plan, because by the time I dialed into my VPS to turn off the program, I had already placed 1,830 text messages to myself in a 20 minute time span!



Did I mention that I ended up sending 1,830 text messages to myself?

So, in closing, you have to remember: Always test code for an automated strategy in a small money account, because only when the strategy goes live can you REALLY see how it will react.

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{ 4 comments… read them below or add one }

1 Dave WeaverNo Gravatar 05.31.09 at 1:47 am

Were you using Ninja Trader ? If so you can run Ninja Trader on market replay to achieve the same results as sim trading.

2 edNo Gravatar 05.14.11 at 2:07 pm

that sure is a lot of text messages, you really seem to know what your doing, im new to all this NT stuff, none of the strategies seem to be coming out any profit for me in backtesting yet.

maybe im doing something wrong.

3 edNo Gravatar 05.14.11 at 2:16 pm

can you point me to ANY strategy FOR nt that shows some green?

4 mikeNo Gravatar 04.02.12 at 1:17 am

What are you using to send text message notifications to yourself?

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