Testing your strategies

One of the exclusive features of TradeManager is the Backtesting function.

Our easy to use backtesting module allows you to create and test trading strategies using over 20 years of historical economic data.
The backtesting tool will measure profit and loss of your strategy using any of TradeManager's 42 predefined indicators.

It couldn't be easier to work with the backtesting module!

You can create an entire backtesting without the need to write a single line of code.
By default TradeManager will be set on "Assisted Mode".
You can also create your own code, just click on "Creating by Programming"

See below how to back-test your strategy step-by-step:

You can reach the backtesting module by clicking on the "Indicator / Backtest" button of any charting window. Then click on the top left menu 'backtesting'.

First, click on the button "Create Backtestt". The following window will appear:

 

 

 

We are by default on an "Assisted creation" mode that allows you to create your strategy without having to write a single line of code !! Note that you can also create your own code by clicking on the label "Creation by programming" of the window displayed above.

       

The window "Assisted creation" is composed of several buttons (Buy, Sell, Short, Exit short) which allow you to define your buying and selling conditions. You can now define the money management of your strategy by clicking on the button 'Capital management' then on the button 'Stops'. Finally, click on the button 'OK' to automatically generate the code for your backtest!

Example: Let's create a strategy on the Spot British Pound vs US Dollar based on the Stochastic indicator.

On a 30-year period with daily candlesticks, let's start by displaying a simple 150-day moving average on the price and also the stochastic indicator.

 

 

First, click on the button "Indicator / Backtest". Then go to "Backtests" in the top left corner, click "Create Backtest" and choose the "Buy" button to define your buying conditions. Finally, click on the Stochastic chart. The following window will appear:

 

Let's select "%K 1" "Cross Over" "%D 1"

We will now add another condition clicking on the button "Add condition". We click this time on the price chart. The following window will appear:

 

Let's select "Price 1", ">=" and "Moving average 1".

Finally click on the "OK" button.
Let's now define how to sell the buying positions by clicking on "Sell" and then on the Stochastic chart. Let's choose "%K 1" "Cross Under" "%D 1" and click on "OK".

Then, we click on "Capital management" and we set the parameters illustrated below:

 

 

To define the Stops strategy, we click on "Stops" and we choose the settings below:

 

 

Click on the "OK" button and then click again on the "OK" button of the window 'Assisted Creation'.

 

Congratulations ! The program is done, you just need to give a name to your backtest such as "Stochastic" and click on "Validate program".

 

 

Here is the Detailed report that is displayed:

 

 

As you can see, the results are not so good. Let's click on the "Tool" icon of the Equity curve as shown below (outlined in yellow):

 

and then on "Modify ProBacktest". Let's create a variable instead of the number 150 for the moving average. To do so, remove the number "150" from the program and write "number" instead. Then click on the "Add button" of the field "Optimization parameters" and choose the settings below:

 

 

and click on "OK".

 

Finally, click on the button "Validate program". After a few seconds, you get an optimization report that gives you the best strategies upon different criterias like net profits, Maximum DrawDown, % winning trades...

 

The results of our optimization are poor since the best detected strategy is a losing strategy. To improve it, you could try to add new conditions like buying signals only if the %K is below a variable named 'BuyingLevel'. This variable could in turn be optimized between 15 and 40...

With our backtesting tool, all your ideas can be tested ! On the window 'Creation by Programming', you can apply far more sophisticated functions by using our Functions library which you can access by clicking on the button "Insert function" as shown below.

 

A window appears with all the functions available with backtesting module and the corresponding help.
By clicking on "Add", you can insert this function in your program at the location of the mouse cursor.