Visual Backtester Forex Strategies

By Author: Aaron Webber
Total Articles: 26
Comment this article

All necessary parameters and logic rules can be selected from menus, and you do not have to write formulas or a program code. Forex Strategy Builder uses real forex data to perform back tests for the various foreign exchange pairs or time periods and calculate the real life result of the strategy. It supplies detailed charts and statistics, and the automatic journals show all transactions and positions, as well as the changes in your virtual bank account.

When first started, Forex Strategy Builder loads the default strategy New.xml with the historical market data for the strategy, calculates the test and displays the information in charts and tables. The program recalculates the test every time a change in some of the elements is made which may affect its results. For example, if we change the symbol of the instrument, the data period or some of the indicators, Forex Strategy Builder will immediately perform the necessary calculations and show the due charts. This means that we always have loaded data and a calculated strategy available. There is no need to press a button to make the program calculate the strategy. It ...
... does it automatically.

As a whole, the logic of the strategy is determined by the technical indicators, which are situated in the indicator slots. Those are the rectangular slots in the central part of the screen:?:. You can change the strategy by changing the indicators, the rules for their application or their parameters. You can also add new slots or delete existing ones.

We need to pay special attention to two main points:

Firstly, note that only the logic for the long positions is input in the indicator slots. You don't need (and you are not able) to input the logic for the short positions. Forex Strategy Builder does it automatically. For example, if you want to open a long position when the market price has reached the upper Bollinger Band and a short one at the lower band, it is enough to choose Bollinger Bands with Enter long at the Upper Band logic. This is sufficient for the program to perform the requested logic in both directions. Forex Strategy Builder always performs what we have set in the long position slots and automatically determines the mirror logic for the short position.

Secondly, note that the slots are of different types and each indicator performs specific tasks depending on the slot it is placed in.

On the whole, there are four types of slots :
* Opening Point of the Position : This is where the price of opening new positions is determined. Therefore, only indicators which show price can be placed here. Such indicators are Moving Average, Bollinger Bands, Donchian Channel. Indicators such as RSI, for example, cannot be placed here because RSI does not determine a price at which a position can be opened.
* Opening Logic Condition : These slots present logical conditions, all of which must be fulfilled in order to open a position in a given direction. For example, if we place here the Momentum indicator and specify the Momentum rises logic, the strategy will allow us to enter a long position only when the Momentum indicator rises, and a short one when the Momentum indicator falls.
* Closing Point of the Position : This is where indicators which determine the price of closing a position are placed. Again, only indicators which determine concrete price can be placed here.
* Closing Logic Condition : These slots are available only if the slot Closing Point of the Position contains a Bar Closing indicator. Their function is to close a position if any of the logical conditions specified in them has been fulfilled. These slots can be one or two. If at least one of their logical conditions is fulfilled, the position will close. This is different from Opening Logic Conditions where it is obligatory that all conditions are fulfilled at the same time.

Forex Strategy Builder also provides a Strategy Generator that allows even the total newbie to create a strategy with the click of a button. After the strategy is generated, you can read the detailed explanation in the overview. Experienced traders use the generator to add more indicators to their existing strategy and improve their trading.

Other unique feature of Forex Strategy Builder is the Intrabar Scanner. Its purpose is to ensure that the back test resembles the real movement of the price as close as possible by loading all the available time frame data. The intrabar explorer allows you to check the price movement inside each bar and see the exact order of trades during that time period.

The Strategy Optimizer can be used to adjust the indicator parameters for maximum profit but this often leads to over-optimization and we do not recommend it for real trading purposes. Get more Forex Strategy Guide