Stock Watch Pro: Software tools for successful investing: Demo slide 4

BackTesting

Click on a field title next to the image for a detailed description:

BackTesting enables testing of trading strategies on historical data. It allows to test multiple stocks with multiple strategies at the same time. Use BackTesting to:

Test stock performance with one strategy.
Test multiple stocks with one strategy to pick the ones with the best performance for that strategy.
Test stock performance with multiple strategies to increase profitability (useful for optimizing a strategy using different parameters i.e. MA length = 10 days, 25 days, 50 days, etc.)
Test multiple stocks with multiple strategies to pick the most profitable stock/strategy combination.

BackTesting has two views: summary and detailed. Detailed view displays each individual trade and has the following columns: Symbol, Strategy, Formula, Date, Time, Action, Quantity, Price, P/L, P/L %, and Cumulative Profit. Summary view summarizes all trades in the Detail View and has the following columns: Symbol, Strategy, P/L, P/L%, Winning Trades, Losing Trades, Start Date, End Date, Largest Winning Trade, Largest Losing Trade, Max Consecutive Winning Trades, and Max Consecutive Losing Trades. Sorting is very useful on P/L, P/L%, Winning Trades, Losing Trades to find best/worst performers.

Strategy Setup brings up Strategy Setup Wizard which prompts for list of Symbols, Commission, Timeframe (start/end date) and list of trading strategies. It provides an option to replay historical intra-day data (up to 1-minute bars) to see exact buy/sell signals as you would get in real-time, i.e. you can test a daily strategy on intra-day data.

Each Trading Strategy consists of Strategy Name, Entry formula (use Formula Wizard button), Entry Action (Buy/Sell Short), Entry Price (Open/High/Low/Close), Exit Formula (use Formula Wizard button), Exit Action (Sell/Buy to Cover), Exit Price (Open/High/Low/Close), Interval (how often should Entry/Exit formulas be tested), and $Amount/#Shares for each trade.

Multi-Timeframe Backtesting allows you to mix timeframes in Entry/Exit formulas (e.g. buy when 1-min bar is above previous one and Daily Stochastic is higher than yesterday). You can also override all intervals within both formulas by selecting "Override Interval" option (useful to test a strategy on different timeframes without changing Entry/Exit formulas for each timeframe).

The snapshot above shows results of running BackTesting on "All Nasdaq Stocks" Symbol List with "MACD Histogram Crossover" Trading Strategy over 1 year period. The window is in Detailed View, sorted by "# of Losing Trades" in descending order to pick the best strategy performers. For example, CNBC had 5 winning trades and 1 losing trade, generated $845.75 (57.72%) in profits, with 3 winning trades in a row, where maximum winning trade was $304.50.

Using Symbol Synchronization you can double-click on a symbol name to have all listening windows in your workspace display this symbol. Without retyping the symbol, you can examine the Chart, Level II, Time & Sales, Bar Table, and News information for the symbol while the BackTester is testing other symbols.

BackTesting results can be exported to a file for further manipulation by a spreadsheet program like Microsoft Excel.

Useful Examples: Trading Strategies

Cron Technologies, Inc. is excited to announce that the Stock Watch Pro software and certain other assets of Cron Technologies have been acquired by an affiliate of TD AMERITRADE, Inc. Cron Technologies will provide you more information about the acquisition in the coming weeks. Cron Technologies will continue to provide support for current customers for a period of time. If you have questions, then please contact Cron Technologies at: support@crontech.com.