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11/17/2022 |

TrendSpider Software Update: Price Behavior Explorer Upgrade

Hello, traders, and welcome to yet another software update from your friends at TrendSpider. In this update, we introduce an interesting new upgrade to the Strategy Tester, specifically within the Price Behavior Explorer, that allows traders to observe the performance of their winning and losing trades in isolation, as well as some other interesting filters. Details after the jump!

The Price Behavior Explorer

For those of you who are not familiar with the TrendSpider Strategy Tester, one of the main features within it is the Price Behavior Explorer. The Price Behavior Explorer panel is found in the top left corner of the Strategy Tester and was designed to give traders a visual representation of all of their trades. It shows how many entries were taken, how long each trade lasted, as well as how the strategy performs over a period of time, including the duration at which it performs best and worst. By being able to see these metrics relative to the asset performance over the same period, a trader can quickly evaluate the legitimacy of their strategy.

In this update, we’ve added a handful of new data sets which allow traders to further filter the results of their strategy to gain even more understanding as to how it can be refined. These new data sets include:

  • 25th/75th, Pre-Entry
  • 25th/75th, Winners
  • 25th/75th, Winners Pre-Entry
  • 25th/75th, Losers
  • 25th/75th, Losers Pre Entry
This is an image of the new data sets found in the price behavior explorer of the strategy tester.

25th/75th Winners And Losers

The purpose of these new filtering options is to allow traders to specifically see the results of their winning or losing trades in isolation. By offering this filtering ability, traders can see things like:

  • Max drawdown of specifically winning and/or losing trades
  • The behavior differences between winning and losing trades
  • Where winning and losing trades converge

By being able to easily see these results, a trader might be able to mitigate the downside more efficiently. Take, for example, the image pictured below.

This is an image showing thing results of winning trades vs. losing trades within the price behavior explorer.
In this image, it’s clear that when a trade is in a losing position, the longer the position stays open, the more is lost. With that in mind, a trader might be keen to try alternative exit conditions that could control the losses in a more efficient way. In the below image, we’ve added a small stop loss to the exact same strategy used in the above image.
This is an image of the strategy from the first image but with a stop loss added to the exit conditions
Note how the results of this particular strategy change when a small stop loss is added. The downside is mitigated, and the overall results of the strategy increased by 100%.

25th/75th, Pre-Entry

Another important piece to this update is the addition of ‘Pre-Entry’ data. Pre-Entry data looks back 10 candles to see how the underlying was performing, on average, before a trade was entered. Understanding what was happening with the underlying before a trade was entered can shed light on a few items that could affect entry conditions, including:

  • Was the entry well-timed?
  • Should the strategy be modified to enter sooner or later?

For example, in a bullish strategy, if price was well above the zero line for the entirety of the pre-entry data, then it’s possible that the strategy is entering into the trade too late. The equal and opposite could be true for a short biased entry. If pre-entry data is well below the zero line, then it is again possible the strategy is entering too late.

Take, for example, the long-biased strategy below. Note the fact that the price of the underlying is above the zero line for nearly the entirety of the pre-entry data. With price steadily above the zero line, what this shows us is that the underlying was already performing well ahead of our entry. By the time we enter, it seems it’s too late, which is shown in the results of our strategy being below the zero line almost instantly, and for the duration of our trade(s).

This is an image of a poorly timed long biased strategy with the pre entry data turned on.

In the below image, we utilize a similar, long-biased strategy but slightly altered to enter into the trade sooner. Note the fact the pre-entry data is consistently below the zero line, but once our cumulative trades begin the results of the strategy flip and stay consistently above the zero line. This shows a much better-timed entry to the previous strategy.

This is an image of a better timed entry visualized via the pre-entry data.

For a further look into this tool, take a moment to watch this video from our founder, Dan!
New Update! Strategy Tester: Price Behavior Explorer Upgrade

As always, we hope you find this new update helpful. If you have any questions, feel free to reach out to us in chat via the ‘Contact Us’ button in the bottom right-hand corner of your chart!