Would you trust an online backtesting tool to build strategies ?

Discussion in 'Automated Trading' started by Spikeet, Aug 28, 2022.

  1. mikeriley

    mikeriley

    At the end of the day the only thing that matters
    in Trading/investing is if the backtesting earns
    profit. I never made a dime from backtesting
    strategies and then trying them on a live account.

    But forward testing in sim mode prior to live
    trading now earns me a decent income.

    Yup..it's hard work to forward test vs pushing
    a button on backtesting software.
     
    #11     Aug 28, 2022
    mason macgregorson likes this.
  2. #12     Aug 28, 2022
    murray t turtle likes this.
  3. we are not discussing cost or ease of use but back testing
     
    #13     Aug 28, 2022
  4. It's not your modeling software that is causing that. It's a misunderstanding about what a trade price represents. You don't get to buy or sell at the last trade price. Over a large dataset you will always find the slippage moves against you. For highly liquid stocks the percentage is small. As there is less liquidity the percentage increases. It is important to model and test your order entry algorithms.

    The reason these canned back testing software platforms don't do this is because few of their customers appreciate or care about the mechanics of performing a trade. It's also complex and requires a lot more data to do it correctly. Few people have access to all order book changes at all the exchanges, for example. That is an absolutely massive amount of data that dwarfs the size of the tick data.

    All my strategies track and attempt to optimize order entries. It is a critical aspect of building a quantitative trading system.
     
    #14     Aug 28, 2022
  5. You are probably also aware that over fitting is your biggest challenge. Ninja Trader is simply doing linear regression. It's like the guy who has a hammer and thinks everything is fixed but hitting it with his hammer. Drawing a straight line through a cloud of data points is important analysis but it's pretty basic. For me it's just one tool in the toolbox.
     
    #15     Aug 28, 2022
  6. What actual side by side data do you have?
     
    #16     Aug 28, 2022
  7. not according to Ninja
     
    #17     Aug 28, 2022
  8. lol. Ninja is not going to tell you how this really works the way I did. It's not because they are hiding something. They just don't know/care because efficient order execution is not what their customers want to pay for.

    You are looking for a source that you feel is reliable so you can adopt their beliefs as your own. You will get ahead much faster if you learn the mechanics of what is happening and apply objective thought. Forget what some retailer says. No one gets rich by carefully reading about what someone else is selling.

    Also understand that the link you provided at Ninja gives reasonable information. I'm not in disagreement. I was simply explaining to you why those facts exist.
     
    Last edited: Aug 28, 2022
    #18     Aug 28, 2022
  9. actually I back test in Trade Station, matches nearly to the penny.
     
    #19     Aug 28, 2022
  10. Amibroker ----> The world's fastest portfolio backtesting and optimization

    Amazing speed comes together with sophisticated features like: advanced position sizing, scoring and ranking, rotational trading, custom metrics, custom backtesters, multiple-currency support


     
    #20     Aug 28, 2022