Adrian ReidFounder of Enlightened Stock Trading

How I Validate Trading Systems Across Markets, Timeframes & Stocks Real Backtesting Process

6 Nov 2025 · 1 min

Watch on YouTube

0:56

Adrian Reid explains his real backtesting and validation approach for a long-term trend-following trading system. He describes randomly splitting all tickers on a market (example: Australian stocks) into 50% for development and 50% for validation, reserving separate time periods for in-sample testing and out-of-sample validation, and then applying the validated strategy to other markets (Canada, US, etc.) to check robustness (it need not excel, only avoid complete failure).

Chapters

If I'm developing a system to trade in Australia Australian stocks, all stocks on the Australian market. Let's just say it's a long term trend following system. I would take all of the tickers and I would randomly select 50% of the tickers and to develop my system on a random 50% and invalidate it on the other 50%, I would also take a slice of time and test it on that slice of time and save some other another time period to validate on. I would also then take that strategy once I'd validated on Australia and go apply it to Canada, New US and a couple of other markets and just check that it holds up. It doesn't have to work amazingly well on those other markets, but as long as it doesn't completely fall apart.
Sa.