The Trader Formerly Known as Blind Hog! Now there is a name from the past. My old friend Carp D.M. was saddened at the sudden loss and unknown where about's of B.H.

Thank you for asking about forward testing. Forward testing means taking a specific criteria -- method -- that is static -- does not change -- and measuring it's performance in current and future markets -- preferably thru several cycles. Back-testing is essentially form-fitting a method to show it worked in the past in an effort to create a strategy that works going forward. Many hopeful back-tests meet their demise on the forward test.

For example my analysis told me the long-term primary pattern had turned bearish in the Euro at the begining of 2012. But my method told me to wait for a rally/retracement back up into my sell zone to short. While I had seen self-similiar behavior on the short-term charts for years up to that point, the method on that high a time frame had only worked in the past. Price started a long drawn out correction higher thru 2012, 2013, and into 2014 which supported my theory of Risk Tolerance Threshold Theory to the T. The majority of market participants were bearish which long-term was the correct market stance, but they were impatient and committed to positions beyond their own risk tolerance, i.e. GREED. I waited a long time to establish short, i.e. a long U.S. dollar position. IN early 2014 I could not stand having so much dry powder and I went in, before the test of 66%. The market put in one more leg higher to 66 and than produced a double top. I was very calm and committed because I knew that all those traders and investors who were right long-term were the ones capitulating and closing their positions for FEAR of further losses. At the same time every last banker in the world had a shot at hedging every .10 euro of exposure --- NEED. Since then of course the Euro and commodities have collapsed -- see chart.

Extensive forward testing contributed to my confidence in my chosen method and led me to focusing on improving it based on my understanding of fractal geometry and human nature. I was able to throw out all the other garbage and nonsense that had accumulated between my ears -- no small feat --and boil the trading process down to a one page plan whose forward test continues to produce desirable results.

The next stage is programming the computer to trade the method for me -- not as easy as it sounds as the computer is limited in it's pattern recognition ability and no match for the human brain, and programmers are challenged by the subtleties of human nature and most everything they were taught about economics and markets.