Manual Strategy Testing Tool
What is the DIG Manual Strategy Testing Tool?
The DIG Manual Strategy Testing Tool has been developed in response to multiple requests from clients.
Many times, you have an idea for a new strategy and you want to test it. Traditionally, you have had two ways to go about testing:
Search the signals visually
- Pros – Everything is always profitable because you simply choose not to see the bad trades.
- Cons – Everything is always profitable because you simply choose not to see the bad trades.
Have a talented programmer code the strategy
- Pros – Precise rules, ability to back test and analyze results.
- Cons – Expensive and time-consuming.
Now you have a third way. The DIG Manual Strategy Testing Tool gives you control. You can now back test any strategy you like and get precise results using the analysis tools that TradeStation offers.
How Does it Work?
The DIG Manual Strategy Testing Tool is simple to use yet extremely powerful. To test your new strategy, take the following steps:
- Open a new chart; place the correct symbol, time frame and bar type on it.
- Place all the indicators you want to use on the chart.
- Start at the left-most date on the chart.
- Select the text tool for writing on the chart.
- Visually scan the indicators and the chart and locate the exact entry point. Once you find it, click on the chart and write “L” or “l” or “+” for a long trade or “S” or “s” or “-” for a short trade.
- Continue scanning for the next signal or for an exit. If you want to close the trade, click on the chart again and write “F” or “f” or “=”; this will flatten and close the trade. You can also write a signal opposite to the previous trade and the trade will change direction.
- After you have completed marking all the trades, place the strategy on the chart, and let the magic begin.
- The strategy will automatically locate all the text objects, sort them by date and time, and execute all the entries and exits precisely.
- You can now open the strategy report and access the most powerful tools that exist to check whether your strategy works or not.
The tool is reliable and simple to use, and it gives you all the analytic information you need.
MACD + EMA Filer Example
Let’s see how it works with an example. We will go long when the histogram of the MACD crosses over the zero line and short when the MACD crosses under the zero line, but we will also filter the trades based on a 200 simple moving average. We will exit the trade if a signal in a different direction is formed or we get two consecutive bars to the opposite direction. Each entry will be with $20,000.
Stage 1 – Add the indicators and make the entries and exits.
Stage 2 – Add the DIG Manual Strategy Testing tool.
Stage 3 – Analyze the results.
- Works on any chart type, any symbol, any time frame.
- Easy to use.
- No need to place the text in order on the chart.
- Gives you the power to fully test your new ideas.