EMA Crossover System ; Why Back Testing is So Impo
It is very important to apply the rules of your foreign exchange system in a realistic way when back testing. So for example, if you are using an EMA crossover system, you might spot a crossover on a past chart that was followed by a 200 pip rise. Do you write down that you would have made 200 pips from that trade? No, it is probably not realistic. First you might have spent a minute or two checking the signal against other time periods or other indicators. Most forex systems require you to do that. In that time the price might have changed.