Backtesting: Testing Your Plan on Past Charts
Risk warning: Past results do not predict future results. This is education, not financial advice.
Backtesting means checking your plan on old charts before you risk naira.
How to do it simply
- Pick a pair and time (for example EUR/USD, London 8am–5pm WAT).
- Scroll back 3–6 months on your chart.
- Move forward candle by candle.
- When your entry rules appear, mark entry, stop, take profit.
- Note win or loss.
Test at least 50 trades. Write them down.
What to look for
- Win rate — how many wins of 50?
- Average risk-reward — for example risk ₦150 to make ₦300 (1:2).
- Net result — total wins minus losses after costs.
If the plan loses after 50 tests, change one rule and test again.
Do not test during news spikes if your plan avoids news. See What Makes the Market Move.
Keep results in The Trading Journal and practise the plan on demo How to Use a Demo Account.
Rate used: ~₦1,500 / $1. Small amounts like ₦150 use same rate.
Bottom line: Test your plan on 50 old candles with 1:2 risk before live, or you risk trading an unproven idea with real naira. Links To Guides: Pillar 3 (Beginner Setup).