 | | Our Strategy Testing Service applies your search criteria for finding trades over the last 8 years of market data and simulates trading the results with an allocation model of your choosing and a set of stop-loss exit rules of your choosing to calculate returns over each trading cycle. Historical strategy testing like this is much more powerful than paper trading:
- Paper trading takes months, strategy testing can be done in less than an hour.
- Strategy testing can be applied across bullish and bearish market cycles - not just over what happens in the next few months.
- Strategy testing can be applied across a basket of stocks that meet your criteria to gain experience from several stocks at one time.
Of course, the future will take a different path from the past, but how your search method performed in the past will provide you useful information on how it might be expected to perform in the future.
The Strategy Testing service uses any saved search you have for a strategy and applies it to the market sometime in the past (up to 8 years). The screened results become a list of opportunity trades sorted in the order you specify in the saved search. You choose how many positions to trade from the list and how much to invest in each position. Once the trades are made your exit criteria can be implemented or the positions are closed when the options expire.
Choices of exit triggers include:
- Stock % change up and or down
- Option % change up and or down
- Stock price relative to a moving average, index or strike price
- Sentiment rating
- Expiration of the option
Once the position is closed an accounting is made on the profitability of the trade. Prices for the individual stocks and options are listed for each trade in chronological order.
After the trade accounting is completed, money is made available to apply to the next set of opportunities made by the application of the search. This cycle of search, invest, and exit is applied over and over for the period of time specified. A summary total of wins, losses, and returns is reported.
Historic Testing Reports are available for the following strategies:
- Covered Calls
- Naked Puts
- Bear Call Credit Spreads
- Bull Put Credit Spreads
- Buy Long Calls
- Buy Long Puts
- Long Stocks
Each report is $50, which includes a detailed report of:
- The trades your search criteria would have picked
- over the historical time period you choose
- when and why the trades were exited
- profit/loss for each trade
- profit loss for the entire trading plan over the test time period
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