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Sample Strategy

Strategy backtesting allows you to build and test trading strategies across a range of historical dates. Tests can be made against specific symbols or you can use position sizing rules to simulate multi-holding portfolios.

Strategy

A strategy consists of trade criteria, stops, targets, and position sizing rules. For example, a strategy may consist of the following elements:

  • buy when the Close Price crosses above a 5 day Moving Average
  • sell when the Close Price crosses below a 5 day Moving Average
  • close a position, using a stop, if it loses more than 3%
  • close a position, using a target, if it gains more than 9%
  • start with equity of 100,000
  • buy 100 shares on each trade regardless of stock price or volatility
  • maintain no more than 10 open positions at a time, with a maximum of 5 new positions on any one day
  • when there are more buy signals than position slots available, choose stocks in descending order of 30 day Average Volume.

Backtesting

Backtesting is the iterative process of testing your strategy, analyzing the results, making adjustments, and re-testing. It can help you find which trading approaches work profitably as well as those which do not. And because the tool is portfolio-based you can also see how different position sizing choices can affect overall profitability even for the same trading criteria.

Sample

Click test strategy to run and view the output from the strategy described above. Alternatively, you can quickly create a custom strategy using your own criteria and rules.

See the help guide for more detailed information on creating and testing strategies.

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