Adrian Reid explains why traders keep tweaking their strategies until they blow up accounts. Optimize once using a repeatable process, then stop. Treat backtesting like a pilot's checklist: same steps every time, documented, never skipped.
How do I know when to stop optimizing my trading system? When is it enough? Most people will optimize and then change something and then optimize again and then change something else and add another filter and then optimize again. And there's this kind of looping kind of process that feels never-ending and actually is never-ending. It's a perfectionism that actually won't help your trading. Optimization only happens one time. So I'm not looping and re-optimizing. It's once. So when you have that linear process, you don't have to make decision about when to stop. You just do each step in the process. And if you don't have a backtesting process, then, you know, we should talk because you need one. Because if you do it the same way every time, it gets faster, you get better at it, you make better decisions, you'll be able to eliminate or reject the bad ideas more quickly so you can get on to the good ones. Having a solid backtesting process really accelerates your trading journey. It's one of the most powerful tools for a systematic trader. Once you know how to backtest, get a process that is the same each time. It's like a pilot's checklist. When a pilot gets on the plane, they don't just go, ah, should I check the fuel gauge today? And the wings are nice and clean. And oh, that engine hasn't started. They didn't just— they didn't do that. They have a pre-flight checklist and they check everything. Why do they check everything? Because if they don't, people die. If you don't backtest the same way with a checklist each time, guess what? People don't die, but your account's going to get hurt.
