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Day Nine

You know that feeling when you're super motivated, have a ton of ideas, and decide to tackle everything at once? Yeah, that's been me lately. And, as I'm quickly learning in algo trading, "everything at once" usually means "getting nothing done efficiently."

I've been deep into the backtesting phase for my news straddle strategy, and in my enthusiasm, I set a ridiculously ambitious goal: to manually backtest 7 currency pairs per major news release (think NFP, CPI, etc.). If you've ever tried manual backtesting, you're probably already wincing.

The Sheer Scale of "Too Much"

Let's break down why that was an immediate recipe for burnout and inefficiency:

  • 7 Pairs: That's EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CAD, USD/CHF, NZD/USD (or similar). Each one needs separate chart analysis.
  • Per News Release: Major news events happen frequently.
  • Manual Process: Each event on each pair requires meticulous charting, noting entries, exits, stops, targets, and calculating results.

The sheer volume of data points and decisions for just one news event across 7 pairs is mind-boggling. Trying to do this consistently for multiple past releases is not just "too much," it's a guaranteed path to exhaustion, error, and ultimately, abandonment of the strategy.

My initial thought was, "I need to see how this strategy performs across a wide range of pairs to prove its robustness!" While that's a valid long-term goal, it's completely unsustainable for initial manual testing.

Reining It In: Focused Manual Testing

After hitting a wall of chart fatigue and realizing how little actual progress I was making, I've decided to pull back significantly and adopt a more focused approach. This is a crucial lesson in iterative development.

For now, my manual backtesting efforts will be scaled down to:

  1. US News Releases Only: These are generally the highest impact and most consistent events. Focusing solely on these simplifies the data sourcing and event identification.
  2. EUR/USD Only: This is the most liquid and widely traded currency pair. If a strategy can't prove itself consistently profitable on EUR/USD, it likely won't be profitable on less liquid pairs anyway. It serves as a perfect testing ground for the core logic.

This significantly reduced scope means I can now thoroughly and accurately backtest a reasonable number of past events for one pair, really digging into the nuances of how my strategy would have performed. This focused effort will provide far more valuable insights than a broad, shallow, and error-prone attempt across many pairs.

Once I have a solid understanding and promising results for the US news releases on EUR/USD, then I can consider gradually expanding. Maybe add GBP/USD, or explore a different set of news releases.

This change in approach feels like a massive weight off my shoulders. It's a reminder that sometimes, less is truly more, especially when you're a beginner trying to automate a complex process. The goal is to build a robust foundation, not to conquer the entire market in one go.

Have you ever tried to do "too much" in your trading or coding journey and had to scale back? Share your experiences and how you learned to manage your ambition in the comments!

Happy (and now more focused) algo trading,

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