Best Backtesting Software for Trading Experts and Beginners | Build Alpha

1. BEST BACKTESTING SOFTWARE FOR TRADING EXPERTS AND BEGINNERS BUILD ALPHA SOFTWARE www.buildalpha.com

2. INTRODUCTION Backtesting known as Systems Testing is the concept of taking a strategy and going back in time to see what would have happened if the strategy had been faithfully followed. The assumption is that if the strategy has worked previously, it has a good but not certain chance of working again in the future, and conversely if the concept has not worked well in the past, it probably will not work well in the future. The backtesting of trading strategies is important for brokers and investors to judge if the strategies are profitable under certain circumstances. It helps the users learn how a trading strategy is likely to perform in the marketplace. It also provides the users with the opportunity to improve a trading strategy. Due to the many benefits of backtesting, it is widely used by brokers and investors.

3. How Backtesting Works Future Market Condition Historical Market data Trading Strategy Revised Trading Strategy

4. Features of Best Backtesting Platform The backtesting platform should provide historical data on which the traders can backtest their trading strategy. The in- sample data is the initial historical data on which a strategy is tested. The backtesting platform should allow the user to compare the strategies with the random signals, which helps to ensure that the strategy possesses an edge and is not curve-fit. Furthermore, the two can be compared with various evaluation parameters such as net p&l, drawdown, edge ratio, profit factor, etc.

5. The backtesting platform should provide a ‘Variance Testing’ feature that enables the users to create hypothetical equity curves by simulating a strategy over the next N trades. It helps the traders to vary their win rates and the number of trades by analyzing the predetermined results. Financial markets are subject to varying degrees of volatility at different times. Hence, a strategy that has performed well in the past may not do so in the future. Thus, it is important to note that trading strategy should be tested by considering the different degrees of volatility to gauge its true performance. Hence, a backtesting platform should also have a “Noise Test” feature to add or subtract the selected noise(volatility) to the original historical data and retest the strategy with newly generated price data with different noises.

6. The ‘Randomized Out of Sample’ feature in the backtesting platform helps run the strategy on random and non-continuous data to ensure that a weak strategy is not passed through due to any strong trend in the underlying data. The backtesting platform should have a minimum variance portfolio test feature that gives an optimal weight to each strategy in the portfolio and optimizes its risk-adjusted return. Forward performance testing is a feature that enables the traders to simulate actual trading to test the system.

7. Best Backtesting Platform Build Alpha is the best backtesting platform that helps you backtest the trading strategies based on various evaluation parameters such as win rate, profit factor, drawdowns, etc.

8. Contact Us. We’d love to hear from you. Feel free to contact us: Address: 4929 Skyway Drive Apt 3418 Jacksonville FL 32246 Phone: 5612039143 Email Address: david@buildalpha.com Website: www.buildalpha.com