Interpreting Trading Strategy Results

It is essential to correctly interpret the results of a trading strategy. You may display them by clicking "Trading History" tab. First of all you may compare the cumulative (when all the proceeds of the previous sale a completely reinvested back) or summarized (fixed amount invested) performance to a "buy and sell" performance. Apparently when the trading performance by the strategy is better than buy and hold you may consider it as advantageous. Also do not forget about commissions and the fact that during the time when you have a "cash" position you gain some interest. Thus for example equal performance of a buy and hold and a selected strategy means that the trading strategy is performing better then buy and hold. 

You may see a great gain or a great loss by applying a strategy to one stock. This is not really an indication that the particular strategy is good or bad. Try applying it to a group of stocks by changing "Apply to" settings on "Strategies" tab and clicking "Run" button. Then you may select "Report"-"Summarized Performance" from the top menu and click "Calculate" on the dialog button. You'll see averaged returns for the strategy applied to a group of stocks.

Watch for overall market performance in the selected trading range. Sure enough when the market in in a downward trend some of the strategies will show negative performance. That does not mean that they are bad. Compare the changes in the major indices during the same time period to the performance of the strategy.

Finally you may look at the chart and see where the strategy places "Buys" and "Sells". Try to see if they are optimal or close to the optimal. You may try adjusting the values for the parameters for the strategy by changing them on the "Strategies" tab and running the strategy again.


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