You may not have much respect for market chimps now, but if you take the time to study our work and put our suggestions into action, you may come away with respect and praise for us. In order to determine the validity of any system, it is crucial to remember that simply reporting highly favorable results does not guarantee success with that system in real-time trading. Such highly optimized systems are not designed to portray the worst-case scenarios, but rather, are developed to demonstrate optimum past performance. Following certain rules in system development and testing will increase the likelihood of the systems going forward effectively in real time. However, ignoring these rules or committing certain blunders will almost guarantee you that your system will not perform in the future no matter how good it looked in back testing.
Traders have their different reasons for testing systems.
All too often, they disregard the results or rationalize poor results. They mistakenly believe that they can turn a mediocre system into a winner by managing the trades differently or by practicing different money management rules. Other traders develop systems in order to market them to the public. Their objective is to optimize the system in order to reflect best-case performance. As attractive as these products may seem, the odds of them making money in real-time trading are slim indeed because they were developed in order to show the best case scenario.