Backtesting and Optimization

If you have a trading system or have an idea for a trading strategy, we can perform backtesting and optimizations. This will provide you with data to help you determine if your strategy has merit.  This data in no way will guarantee that your strategy will be successful in the future, but it will give valuable data for the risk you would have incurred had you traded your strategy based on historical data. While having and knowing the results from backtesting does not in itself make you money, it could very well save you money.  In most cases the cost for backtesting is minor compared to money that a poor system will loose.

Note: Backtesting and optimizations in no way guarantees future performance.

BackTesting and Optimization Services:

Basic Service – $250

This service includes setup and optimization of most straightforward strategies.  These are strategies that are trading stocks, futures and forex.  Exit criteria is limited to profit target, stop loss and break even.  You may have up to 5 entry criteria.

Additional optimizations are billed at $120/h.

For strategies that do not fit within our basic service contact us for a free quote.

What is BackTesting

Backtesting is the exercise of validating a trading strategy on prior time periods. Instead of validating a strategy for future time periods, which could take significant time, a trader can do a simulation of his or her trading strategy on relevant past data in order to validate the effectiveness. When you backtest a theory, the results achieved are highly dependent on the price action of the tested period. Backtesting a theory assumes that what happens in the past will happen in the future, and this assumption can cause potential risks for the strategy.
For example, say you want to test a strategy based on the notion that break outs or support and resistance generate a defined result. If you were to test this strategy during the specified time periods, the strategy would perform significantly better.  However, trying the same strategy outside the specified time periods would result in poor returns.
As frequently stated and all too true: past performance does not necessarily guarantee future returns.