Online Stockmarket Trading Update

Without question, the Market Analyser provides one of the most sophisticated back testing facilities available. Create a complete trading system using your own custom entry and exit rules, apply a stop loss and you now have your own system that is ready to be tested in the back testing module. The Trading System module is only available to subscribers Platinum version of Market Analyser.

Using the Trading System

Click Menu, Analysis, Click Trading System

There are two tabs at the top. The Build Strategy is where you create your strategy. The Run Strategy is where you can back test your strategy over the dates you select.

Build Your Trading Strategy
To create a new trading strategy click Create and click Yes when the prompt window appears. The first step is to define your entry points. Click Add next to the Selected Entry Formula and select the Indicator you wish to use from the Available Formulas menu.

The next step is to define your exit points. Click Add next to the Selected Exit Formula and select the Indicator you wish to use from the Available Formulas menu.

Now set your stops. Click Add next to the stops and select the type of stop loss you wish to use and type the parameters for the stop loss.

Finally set up the Trade Settings for the execution of the strategy, including where the entry and exit occur as well as the maximum value per trade and the brokerage charges. Select the watchlist you wish to use from the Check for Signal menu. You can click Custom List if you wish to create your own list of shares to test.

Remember to click Save and type in the Name of the strategy.

Back Test Your Strategy
After you have completed your strategy you can click Run Strategy to test the strategy on the selected shares.

Select the correct trading strategy that you want to test from the Trading Strategy menu. The most recently created strategy will automatically be selected. Select the dates for the back test period on which you wish to run the back test. You can select from the calendar, or click on the day, month or year to type your dates. Type in the initial equity you wish to use, this is the amount of money you will have in the account to trade. To run the back test click Run Back Test.

When the back test is completed you have a selection of tabs to choose from.

• Profit Chart
• Standard Report List
• Summarised Report by Code
• Summarised Report

If you ran the back test through a large watchlist like the ASX 200, Market Analyser will take some time to prepare the summarised report by code. It is recommended that you view the other selections first while the report is being prepared.

The Profit Chart shows the increase, or decrease in equity. Ideally you would like to see a curve that rises smoothly over time with small drops. These drops are known as draw down. The larger the drawdown the harder the strategy will be to trade.

The Standard Report list provides you with each trade. The date entered, the purchase price, exit price and profit and loss for each trade. You can double click on any trade and it will open the chart allowing you to view the performance of the share.

The Summarised Report prepares a complete summary of the scan with all the relevant statistics regarding the performance of the strategy.

The Summarised Report by Code allows you to identify particular shares which worked well or did not work well and it may be possible to adjust your strategy to eliminate some of the bad performing shares or include more shares that show good results.