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Strategy Backtesting

Strategy backtesting is an essential tool to see if your strategy works or not. Backtesting software simulates your strategy on historical data and provides a backtesting report, which allows you to conduct proper trading system analysis. The 64-bit version lets you load as much data as you need for even the most accurate backtesting. For technical information on this feature look at the related Wiki page.

Accuracy is key

MultiCharts is a solution created specifically for strategy development and backtesting. Our philosophy is that strategy backtesting should be as realistic as modern technology allows. Multicharts 64-bit makes possible to handle huge amount of Tick-by-Tick data for precise backtesting.

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Realistic backtesting

Even though no approximation can be 100% perfect, we have done everything to accurately recreate past market conditions and order execution for strategy trading. Typical backtesting engines have a lot of assumptions and shortcuts, which result in unrealistic testing and unreliable results. MultiCharts is an institutional-level trading platform that minimizes assumptions and considers many factors.

Advanced tech

Strategy backtesting often needs a lot of data, and software that is capable of processing it. Multi-threading is used when you process Strategy Optimization in MultiCharts. It spreads multiple tasks into different cores, so that they complete much faster. 64-bit version of MultiCharts lets you load even years and years of tick data for detailed price movements.

Easy to read

You can change how your signals appear on your chart—in just a few clicks. Exit orders can be connected by a visible line to all related entry orders—the line will be green if the trade was profitable, red if not. If you don’t like those colors, or any other visual aspect, you can easily change it.

Choose your currency for backtesting

Base currency allows calculating profit and loss during the strategy backtesting with a specified currency for Forex pairs or non-US symbols. If you backtest your strategy on a symbol that is based in a different currency than your broker account then you may want to apply a currency conversion. To make the results as close to perfection as possible, we use actual currency rates for each day. All currency conversion takes place behind the scenes to make your trading as easy as possible. We use our servers to request data in the background and perform necessary calculations.

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All essential factors contained within

Our backtesting software considers the following essential factors: liquidity, tick-by-tick price changes, ask-bid-trade price differences, commission, slippage, initial capital, interest rate and trade size.

MultiCharts

Taking liquidity into account

When MultiCharts’ engine backtests a strategy, it recognizes that not all limit orders will be filled, due to the lack of liquidity. For this reason, you have a choice to fill orders when a price target is hit, or when it is exceeded by a certain number of points (pips). More info is on our Wiki page.

Ask, bid, and trade prices

Backtesting takes into account that real buying happens at ask prices, real selling at bid prices. This makes our backtesting simulation as realistic as possible. Precise Strategy Backtesting can give the user a more realistic emulation. To backtest high frequency strategies like statistical arbitrage, the user may need take into account the historical bid/ask data in addition to the historical trade data.

Tick-by-tick simulation

Bar Magnifier is essential for increasing precision during backtesting. MultiCharts can construct larger bars out of smaller components — second and minute bars out of ticks, hour and day bars out of minutes. You can recreate exact price movements within each bar by using the Bar Magnifier. For example, Bar Magnifier can invisibly load minutes that make up the hour, and strategy will be backtested on a minute-by-minute basis. Learn more technical details here.


Strategies for immediate practice

MultiCharts’ backtesting engine even emulates market, stop, limit, stop limit and one-cancels-other (OCO) orders. Profit target, stop-loss and trailing stops are also standard backtesting features. On top of that, MultiCharts comes with more than 80 EasyLanguage strategies, so you can practice backtesting.

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