Backtesting is a great way for investors to assess how a particular trading strategy might have performed in generating potential returns on an investment during a specified historical period. In order to analyze your strategy click on Backtesting and explore the strategies available – or build your own.
You can also filter backtesting strategies based on its programming language.
Find your preferred strategy and click “Select”.
When you select your strategy a new configuration area will open, this area has two sections:
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The script editor for those who wish to build their strategy using C#, F# or Python. Here you can start editing your strategy right away.
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The Launcher settings which allow you to select different parameters to test your strategy.
When you have completed the configuration of your settings proceed to click on “Run Backtest”.
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Explore the other tabs in this section:
- You will find more parameters to fine-tune your backtesting strategy. Let´s explore each one of them:
“Base” offers the basic Buy and Sell activation buttons for your backtesting exercise.
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“Buy Settings” presents all the buy order parameters that will command your Machinas trading actions:
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Easily set up your Buy amounts with percentages:
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Update your “Sell Settings” in order to trigger orders based on your preferred strategic parameters, i.e. try your backtesting strategy with sell orders that only trigger when a certain profit target is hit or create a combined strategy using a “Max Open Time Sell” order and a “Profit Target”. Get creative, test away!
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Configure a Stop Loss, “a smooth sea never made a skilled sailor”.
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Here enable your “Trailing Stop Loss”:
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A trailing stop is an order type designed to lock in profits or limit losses as a trade moves favourably. Trailing stops only move if the price moves favourably.
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Select the “Auto Close” option to sell your position automatically after a certain period of time.
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You can always “Export” or “Reset” your settings, and when your strategy is ready click the “Run” button to fire the back testing engine and wait for the results.
The results of your backtesting strategy will load in a few seconds, review the data in the following order:
- The header will show you the pair you are trading, to the right you will find the period of backtesting and the results compared in two ways.
- The bottom area will show you statistics of your trading activity.
Focus closely on the data highlighted by the arrows, which present two crucial readings:
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Left indicator: expresses the strategy´s performance or realized profit/loss (open positions are not yet included)
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Right indicator: expresses the market´s performance during the selected period.
Apply these findings judiciously, bearing in mind that every aspect of your backtesting strategy can significantly influence the outcomes. Explore a variety of scenarios to optimize your strategy.
