2.6 Backtester

Backtester(BT) allows you to simulate the set of rules created in Rules Composer based on historical market data to test out your trading ideas before actually applying them for future real trades.

After backtesting, if the return on capital is not satisfactory, you can refine the set of rules by going back to the Rules Composer to change the rules parameters before using the BT again to test. You can reiterate through this multiple times until you are satisfied with your trading strategies.

Let’s examine the functions available in Backtester in Figure 2.14:

Figure 2.14: Backtester

1. Buy/sell rules selection.

2. Scope of rules to be applied to: by market, market sector, user’s defined watchlists.

3. Define backtesting period.

4. Portfolio strategy.

5. Initial capital allocated for the backtesting.

6. Brokerage fee.

7. Button to start the backtesting process.

8. Display results from backtesting.

9. Click to show the performance statistic table of backtesting result.

10. Click to minimize the XPertTrader window to view XP-triggered signals on charts.

11. Click to save the backtesting result.