Does Back Testing a Trading Strategy Work?

Paul Warren, a forex trader and mentor comments about backtesting a trading strategy. Do successful traders always backtest their trading strategies. I think that backtesting plays an important part but sometimes traders take it too small. I have developed some of my best ideas simply by looking at charts and I've always basically backtested that sometimes manually and sometimes with software programmes. What I have is that sometimes people come an area of curve fitting in that they basically test an idea and maybe backtest it out and then continue trying to perfect it when market conditions are changing.

Comments

1. Your dead right what you said, i got caught out on the proplem of curve fitting.