Verification

I took a one-week break during the week at GW.

Thank you very much m(_ _)\"m)

I spent time with my son at the baseball club experience and at a park during a kindergarten class gathering, so I was outside almost the whole time lol

Even in the market, taking a rest now and then is important.

When you step away from the market for a month, you get various insights when you’re not watching charts???

If you don’t have insights, you don’t have enough knowledge.

If you don’t have the knowledge to spark insights, no insights will occur?‍♂️

Store solid foundational knowledge,and find the bestway to earn that suits you!

Now this time“Validation”I will talk about it.

What is validation?

In short,“practice”is what it is.

For those who have never validated, it’s like entering a match without practicing.

In the market, a match means real-money trading.

And professionals are on the same level.

I bought a bat.

(I installed a chart tool)

I went to hit the balls thrown by professional pitchers without practicing anything.

(I deposited without validation)

The aim is a home run.

(The aim is huge profits)

…

…

The result goes without saying, right??

It’s said that nine out of ten investors lose.

(※As I wrote before, it’s unclear whether this is statistically accurate?)

So how many people did proper validation and preparation before challenging the market?

Most people

・Bought their own company stock, or were made to buy it

・Bought good stocks introduced in the news or magazines

・Bought stocks because a new product was coming out

・Bought stocks because of good dividends

Isn’t this how most people enter the world of investing?

I’m one of them too, you know ??

I am a pharmacist.

What interests me is still the stocks of pharmaceutical companies.

Among them, a company with good dividend yield and no risk of bankruptcy…

“Takeda Pharmaceutical Company Limited (4502)”

I happened to make a profit.

I entered the world of investing like this, but profits won’t continue for years with such a fluky method…?

Someday somewhere, you will incur losses, right?

So it’s necessary to conduct solid validation in advance.

Once again, what is validation?

・Confirm the superiority of the method.

・Aggregate various data and understand the risks embedded in the method.

These are mainlytwothings.

For that,“data collection”is performed.

In today’s world, there are many validation software tools, making things very convenient.

・ForexTester

・MT4Practice King Premium

・TradingView

There are various tools you can use to practice.

Is there a mobile app for validation? Practice?

Of courseMT4 and other charts can be scrolled back and candlesticks sent one by one for validationOK.

(MT4 can send candles one by one with F12)

Please use the easy-to-use tools and methods.

?isForexTester“2”the validation data obtained.

Long ago, I validated and practiced a certain method for3years.

If you don’t aggregate data one by one in Excel, you can have the system pull entry to exit and automatically collect all the above data.

※The latest version now isForexTester“5”.

I have done a lot of validation and practice with ForexTester2, soto tell you how to use ForexTester3-5 honestly is unknown to me?

I get questions about how to use it, and I’m sorry I can’t answer precisely?‍♂️?

・ForexTester

・MT4Practice King Premium

・TradingView

I’ve used all three of these.

Among them, ForexTester excels in data collection.

If you’re going to buy some worthless product, it’s worth buying ForexTester to practice!

Now then…

What kind of data do you need to collect?

① Net profit

② Win rate

③ Maximum consecutive losses

④ Total number of trades (n)ntimes

⑤ Profit factor（PF）＝ (Total profit) ÷ (Total loss)

⑥ Average profit

⑦ Average loss

⑧ Fees

⑨ Maximum drawdown

⑩ Capital curve　　　　　　　　

Knowing this much is dangerous if you don’t know it.

How much data does the method you are using currently know?

Let’s look at why it is dangerous one by one.

① Net profit

First, validate: will it be profitable or loss-making?

If it isn’t profitable, it’s meaningless, right?www

No need to explain further, right.

② Win rate

What is the win rate of that method?

Of course, it also depends on the market.

It also varies by year.

It also differs by currency pair.

Test all currency pairs you trade.

Know your win rate within a reasonable range.

③ Maximum consecutive losses

Related to win rate, you should know how many consecutive losses you might endure.

If win rate is 70%…5 losses in a row, what will you do?

・It’s an impossible number of losses, so you can’t use this method!

・Statistically possible, so you keep using this method regardless.

If you did thorough past validation, you would know how many in a row you might lose.

If the win rate is about 70%, five consecutive losses are normal. It happens as a matter of course.

Because you don’t know that,

“Products like this can’t win!”

“A 70% win rate is a lie— I even had a 5-game losing streak! Exaggerated advertising!”

There are product reviews like that. Don’t trust the validation reviews that spread around the market?

④ Total number of trades (n)ntimes

“Win rate 100%. A method that achieved 10 million per year!”

If you see such phrases… would you buy?

It’s extreme, but…

year, time of trading, using leverage like gambling…

Even if you took a few pips, you could achieve it.

This would be meaningless even if it’s 10 million a year, you see?

・How many trades on average per day?

・How many trades per week on average?

・How many trades per month on average?

・How many trades per year on average?

・How many trades per day in the Tokyo market?

・How many trades per day in the London market?

・How many trades per day in the New York market?

You need to investigate these things.

I’m not saying you must check everything; you should understand whether it fits your lifestyle. If you chase trends during Tokyo hours, you may not expect much profit.

Statistically, the minimum required n when taking statistics is30.

At least–trials data are desirable.

Of course, more is better.

⑤ Profit factor (PF) = (Total profit) ÷ (Total loss)

⑥ Average profit

These are roughly the same in meaning, so I’ll summarize…

In rough terms, how much profit can be expected?

Knowing this, you can estimate how much you can earn per day or per session.

Or determine whether there is a risk of loss.

In other words, you can avoid losses you don’t want to incur and determine whether the expected profits are realistic.Data knowledge then allows you to adjust with Lot sizing. That ties into money management!

And here,and Average profit / Average losscan be used to evaluate the probability of ruin in conjunction with the Breusch-Pagan Balser model? (Balsera) But…

If you are going to invest, your probability of ruin should be as close to 0 as possible.

Win rate about 80%, profit/loss ratio about 1.8, so the ruin probability is“0”.

Even so, if the market suddenly changes, or war or terrorism breaks out, or global servers go down, there could be unexpected losses that could bankrupt you?

Most of the people I have consulted in the salon werein the orange to pink area.

（※? Solutions will be discussed later, so don’t worry ?）

Even if you don’t intend to gamble, you are actuallya gamblerin the end.

Investing is a business.

⑧ Fees

Some people validate while ignoring fees entirely.

This iscompletely nonsense.

(Example) A scalping method that earns 3 pips per day with a win rate of 70%.

Monthly net +100万を another scenario.

If you ignore fees, you’ll be profitable.

But with a 1 pip spread… you may end up total negative. If slippage occurs, it’ll be even more negative.

When validating, validate with a wider spread.

（＊Finally, roughly, Trade count × pips = total fees; consider that OK. Validate with fees that disadvantage you.)

I used a USD/JPY spread around 3.0 lol)

⑨ Maximum drawdown

This also ties to money management. You should trade with a Lot that can withstand the maximum drawdown.

“Enduring” is not the right way to say it, but if you go bankrupt, that’s the end, right?

Max drawdown × several times of cushion is desirable.

For beginners, Lot being too large is because you don’t know these things.

・Over what period and how much capital fluctuates?

・How long is the drawdown period?

（How long it takes for capital to recover after it decreases?）

・How long are periods of sideways capital movement (low fluctuations)?

Is it steadily an upward trend?

Or does it oscillate up and down like an oscillator?

Perhaps there are periods of sudden surge?

We verify these visually as well.

If it isn’t a steady upward curve, there may have been a temporary positive spike.

Also, a perfectly clean upward curve could indicate curve fitting, though…?
(＊We will touch on curve fitting in the next installment.)

The data collected is roughly as above.

Even this is quite a lot, isn’t it? (;^_^?

If you use ForexTester or similar software, it can summarize everything automatically, you know?

Did you get at least a sense of the importance of data?

And how much data did you have up to now?

Was it sufficient? Was it lacking?

Not all data is absolutely necessary; it depends on your investment method.

So there are aspects that aren’t strictly necessary.

However, those who aren’t making money in investing are often trading in a way close to systematic trading.

Then data should be known even more.

I hope this will be a resource for your future trading life, even a little?

This has become very long, so I think I’ll end here for today.

Next time I’ll continue with “What data is used and how to validate it?”

Thank you for reading to the end. m(_ _\"m)
That’s all for today.

※I’m grateful for your kind words as always.
Thank you very much.
Below is a paid portion, but please note there is no article in the paid part?
A few people wanted to express their thanks, so I’m creating this.
Thank you so much to those who purchased.