Archives: Backtesting Set Up

Telechart for Forward-Testing Trading Strategies

July 9, 2010 | By jackieannpatterson | 1 Comment | Filed in: Backtesting Set Up, Outside Products Reviewed.

Last week I wrote an article about a situation that often stymies traders who are serious about learning a discretionary strategy.   During forward-testing, many tools inadvertantly give clues as to what the next bar will do, rendering the effort useless. One tool, however, presents a clean view of the chart at all times.   That tool • Read More »

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Forward-Testing Spoilers

July 1, 2010 | By jackieannpatterson | No Comments | Filed in: Backtesting Set Up, Outside Products Reviewed.

Many of the tools I’ve tried subtly spoil the surprise when used for forward-testing. What I mean by forward-testing is taking a chart, scrolling back in time – without peeking! – and then stepping forward one bar at a time.  The purpose of the exercise is to try out a discretionary trading strategy in a safe environment.   • Read More »

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Backtesting Introduction

October 31, 2009 | By JackieAnnPatterson | No Comments | Filed in: Backtesting Set Up.

Click here for my Backtesting video interview at Moneyshow.   It gives an introduction to backtesting and covers two main topics: What is Backtesting? In short, backtesting is the process of testing a strategy by describing that strategy as a set of rules and applying those rules to historical price data.   It is often automated by using a software backtesting • Read More »

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My BackTesting Engine Evaluation in 2007

April 9, 2009 | By JackieAnnPatterson | No Comments | Filed in: Backtesting Set Up.

Before starting the current round of major backtesting, I evaluated several tools to decide which to use.    This article shares the highlights of that endeavor and the main reasons for the outcome. TradeStation was my incumbent.  By 2007 when I made my last evaluation, I’d had a couple years of experience with it as a charting tool and a backtesting • Read More »

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BackTesting Tool Selection Criteria

April 2, 2009 | By JackieAnnPatterson | 1 Comment | Filed in: Backtesting Set Up.

In response to questions about choosing backtesting tools, I’ll share my experiences in the next few posts.     If you’re doing your own backtesting, its worth taking some time and effort to pick the right tool for you because you will need to use it extensively to get meaningful results.   And you risk your account equity when • Read More »

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Testing the Tester

March 19, 2009 | By jackieannpatterson | No Comments | Filed in: Backtesting Set Up.

Here’s another mind-numbing task when you are doing your own backtesting:  testing the tester. This week I was forced to do something I don’t like at all.    I had to upgrade my backtesting software, TradeStation, to a new version in the middle of a set of runs.    But when my computer went whacko, upgrading TradeStation proved to be my only • Read More »

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BackTesting Moving Averages

March 9, 2009 | By jackieannpatterson | 7 Comments | Filed in: Backtesting Set Up, Moving Average, Reports, Technical Strategies.

Why Moving Averages As a trader or investor, the only reason to investigate moving averages is to gain knowledge to increase profits. Like many other technical indicators, moving averages are meant to help us objectively tell the market status at any given time. This helps us see through the emotions of the day and make • Read More »

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Selecting Time Periods for Backtesting

December 17, 2008 | By jackieannpatterson | No Comments | Filed in: Backtesting Set Up.

When people say they want recent data for backtesting, I wonder two things: 1. How do they test longer term strategies using only recent data?   Anything involving a 200 day moving average, for example, needs nearly a year of data just to calculate the average.   Then it needs multiple years of data to get various • Read More »

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How To Clean Price Data for Backtesting

December 16, 2008 | By jackieannpatterson | 2 Comments | Filed in: Backtesting Set Up.

Cleaning data for backtesting is not easy but its very necessary to get meaningful results.    Mis-adjusted price splits can skew the price data and mislead the unwary backtester into thinking they’re found the holy grail when the strategy merely happens to catch the good side of a bad gap. Here’s the steps to screen out dirty data and produce a clean dataset: 1. • Read More »

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Stock Ticker Lists for Backtesting

November 19, 2008 | By jackieannpatterson | No Comments | Filed in: Backtesting Set Up.

As a private trader, I like to scan the whole US stock market for opportunities each day.  I want a backtesting stock list that is representative of my trading style.  However, most other backtesting publications are limited to the stocks in the S&P500 or even the SP-500 index itself.   For my backtesting, I choose a much wider selection of stocks.    The foundation of my stock list is the • Read More »

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