Backtesting Difference: Bar Magnifier and Extended Mode

Hello:

I am using Multicharts 8.7 build 7634 (as of this writing the most recent version).

FYI all questions below are not applied to the Portfolio Backtester but rather a chart.

My issues relate to which is more accurate in backtesting a strategy (considering that IntraBar Order Generation in each strategy is set to "True"):

(1) using the Extended backtesting on bid and ask data ("(1) Bid/Ask") OR
(2) using the Bar Magnifier with a 1 tick resolution and the box checked to enable access for IBOG ("(2) Bar Magnifier").

I would note that

- MC can only use classic strategy backtesting when using the (2) Bar Magnifier mode (no bid/ask data is used).

- For both (1) Bid/Ask and (2) Bar Magnifier above, I have checked the box to enable "Fill limit order when trade price goes beyond limit price by 1 points".

- For (1) above, I used the instructions found here to load bid and ask data: https://www.multicharts.com/trading-sof ... acktesting

Strategy #1 for both long and short orders uses a Market Order for ENTRY, a Stop Order for the STOP and a Limit Order for the EXIT. Which of the 2

settings above would be more accurate?

Strategy #2 for both long and short orders uses a Limit Order for ENTRY, a Stop Order for the STOP and a LImit Order for the EXIT. Which of the 2 settings above would be more accurate?

My inclination is that using the (2) Bar Magnifier for Strategy #2 is sufficient since a limit order cannot be filled at a worse price AND we are using the setting where the price must go by the limit price by 1 point (and we will disregard or just accept that the STOP might have some slippage).

However, is it more accurate to use (1) Bid/Ask for Strategy #1 since it uses a Market Order for entry AND the Stop? Or is (2) Bar Magnifier always the way to go?

According to the Wiki, if the "Classic Mode" is used and then the bar opens/closes on the certain price, the backtest will go ahead and fill the order (regardless of (1) whether the price was the bid or ask AND (2) whether you are buying or selling). As it notes, if the open/close price was on the ask and you are buying or the bid and you are selling, then you would realistically get filled.

Bar Magnifier seems to relate to "re-building" the shape of the bar on a historical basis, ie, "Bar Magnifier is helpful when both the profit target and stop loss occurred on the same bar." See https://www.multicharts.com/trading-sof ... _Magnifier

I am not sure if (2) Bar Magnifier will relate the fill price back to the bid ask. Could there be a scenario where you are backtesting with (2) Bar Magnifier mode and then you go long on a market order next bar but the open was only on the bid?

Or am I just confusing myself???

Thanks for taking the time to look at this. MC is bar none the greatest.

Hello Jstoetz,

I believe it is up for you to decide, which one is more precise and which one should be used (unfortunately due to technical limitations at the moment it is not possible to combine them). In my personal opinion the exact intrabar prices and their true sequence within a bar (bar magnifier) is more important than execution of order on asks and bids (extended backtesting) instead of data 1 prices (classical backtesting). This article may be helpful.