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Jim Dean

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Joined: 9/21/2006
Location: L'ville, GA

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Subject : Guidelines for Backtesting, Tuning and Evaluating
Posted : 6/23/2010 5:29 PM
Post #20854

OmniTrader offers superb tools for developing complete, robust Strategies that we can use to pattern our trading from. All the "steps" of the process, from initial Focus List selection, to detailed Trade Plan execution, are part of the process. There are additional tools such as Seasonality and Group Trader to help us know which strategies and which focus lists might be most appropriate as time moves on.

There are two complimentary tools - Strategy Wizard and Portfolio Simulator, which help us optimize a given approach by means of testing and tweaking the details of the Strategy ... and just as (or more) importantly the allocation method we use for position-sizing. These both have a "starting point" ... the core Strategy, a focus-list, and a period of time (actually, two periods of time).

I'd like to provide some very general advice and explanation here - others may want to follow up with more detailed information. Sometimes, we can fall into the trap of "just trust the computer" mode. We see a button, we push it, we look at the results, we try another button, and so forth.

But we often shortchange the most important tool - the one that makes the difference between this process being a narcissistic hobbyhorse waste of time versus something that truly helps us build understanding, confidence, greater profitability, and more consistent performace ... that most important tool is our *brain*.

Nutshell about all that will follow:

If you don't understand how a tool works, don't use it!
and ...
If you do understand how it works, use it wisely!



[Edited by Jim Dean on 6/23/2010 5:52 PM]

Deleting message 20854 : Guidelines for Backtesting, Tuning and Evaluating


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