Hello, traders, and Happy New Year to you all! In this update, we’re happy to announce some interesting new features to our Strategy Tester that allow for further strategy refinement, specifically assisting in trade management, as well as a simple quality-of-life upgrade! Details after the jump.
Price Behavior Explorer Upgrades
The first addition that we’ve made can be found within the Price Behavior Explorer. Located in the top left corner of the Strategy Tester view, the Price Behavior Explorer provides users with a visual representation of the performance of their strategy.
The view of the Price Behavior Explorer can be expanded via the small, yellow cross-hair in the top right corner of the graph, but the additions to the tool can be seen with or without the tool being expanded to its full-screen view.
On the left-hand side of the image above, you’ll note the list of filtering options. The new additions to this list include ‘# Of Winning Positions’, ‘# Of Losing Positions’, ‘96% of Winners’ and ‘96% of Losers’. When selected and expanded, these options appear as shown in the image below.
Winning And Losing Step-Down Graphs
The number of winning and losing positions, and the period of time they stay open, are visualized via the pink and green ‘step-down’ lines. The X-axis of the chart shows us how long a trade has remained open, and as positions close out, they are deducted from the total number of open trades, hence the ‘step down’ of the line. As the number of days the trade stays open increases, the number of positions that stay open decreases. This is expected behavior.
This particular data set serves multiple use cases. First, it allows users the opportunity to separate their winning and losing trades. By being able to see this separation, users can glean an understanding of how long winning and losing trades tend to last and at what time they tend to be most profitable and least profitable. Users can utilize this to understand how the time in a trade can be refined to optimize returns, cutting losing trades before the losses become unsustainable and taking profit on winners before the market takes it back.
96% Of Winning And Losing Trades
Visualized as green and red clouds, respectively, the 96% of winning and losing trades option allows users to see specifically when, within the duration of a trade, positions perform the best and the worst. Used in tandem with the X-axis value and the step-down graph, users can easily see how many trades make it to max drawdown and max gain levels and can then utilize this understanding to refine their exit criteria.
New Exit Condition Options
Now that we understand how these new Price Behavior Explorer upgrades work, let’s shed some light on the new exit condition options that have been added to the Strategy Tester that help us to utilize what we’ve gleaned from the Price Behavior Explorer.
Within the exit conditions, users now have the ability to add multiple ‘# Candles Passed’ exit criteria. When this option is added as an exit criterion, there is also a new drop-down menu that allows users to define ‘For Any PnL’, ‘If PnL Greater Than X%’, and ‘If PnL Less Than X%’. These options are visualized in the image below.
Previously, the ‘# Candles Passed’ definer could only be used once. Now, by allowing for multiple candle-based exit conditions, users can take into account what they’ve learned from the Price Behavior Explorer and better form-fit their strategies to how the winning and losing trades perform.
For example, if you find that a particular strategy tends to draw down shortly after the trade is taken, you might see fit to set up an exit condition that gets you out of the trade if a particular percentage loss is hit within a short period of time. Inversely, the same can be done for winning trades. You might find that, after a certain duration, a winning trade tends to give back much of what it gained. If this is the case, an exit condition can be set to define that if the percentage gain reaches a specific amount within a specific period of time, a trade should be exited.
Generally speaking, if you want to fit a strategy to a particular chart, this is one of the best ways to do so!
Strategy Tester Full Screen View
Finally, we’ve added a simple quality-of-life feature to the Strategy Tester. Now, users can maximize their Strategy Tester view via the full-screen mode option. By eliminating all other components of the chart view, users should find that this view allows for better focus when building strategies.
In order to expand the Strategy Tester to full-screen, simply click on the yellow crosshair found just to the left of the ‘Maximize’ button in the top-right corner of the strategy tester.
In the below video, our founder, Dan Ushman, goes over the new functionality discussed above. Feel free to give it a spin if you’re having any trouble understanding these new features!