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Friday, May 23, 2008

Back-testing for Oil trading

As a trader, I like to do back-testing for the product that I'm trading in. The purpose of the back-testing is to find which techique is BEST to use as an indicator. Since I bullish on oil, I will just do the backtesting on going long (buy) on oil, and will not do the test on shorting (short sell).

Here is the back-testing for crude oil based on a 2 year period. findings is that Comm Channel Index is MOST PROFITABLE for tracking buy signal for crude oil.


I had also plotted crude oil chart against the indicator. You will see that profit keeps on RISING if you have traded faithfully based on this indicator for the past 2 years.


Just a reminder, this does NOT necessary means that this indicator will still be useful going forward. This is only a guide.

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