Ed Seykota on Testing Trading Systems

Ed Seykota was recently asked:

“I’ve got Excel on my computer…is it possible to make a good trading system on Excel or do I need to purchase…[a] sophisticated software program?”

Seykota Answered:

“A trading system is an agreement you make between yourself and the markets. You can use a number of ways to test the agreement before you make it. Excel has the advantage that you can see everything the system does. Other software has an advantage of speed and ease of use. You might consider starting off with Excel until you get a feel for system trading, and then move on to more specific software for comprehensive testing. You might also consider auditing a few runs of your testing software with Excel, to make sure you have accurate coding.”

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