StockFetcher Forums · General Discussion · Problem with backtests<< >>Post Follow-up
jficquette
22 posts
msg #48755
Ignore jficquette
modified
12/23/2006 1:24:42 PM

If the profit target is hit first before the entry price is shows it as a profitable trade.

Say the entry price on a long is $50 and target price for profit is $51(2%). As the stock comes down to your entry it will fall through the target first of $51 on the way to entry at $50.

If the stock continues to fall and never comes back up then you actually lose on that trade although the system backtest said it was a winner because it traded at both the entry and the profit target. It does not care which it hit first.

This is a critical flaw and if not addressed basically renders Stockfetcher useless for backtesting.

John



tomb
261 posts
msg #48758
Ignore tomb
12/23/2006 2:11:53 PM

Hi,

The current applicable rule applied by StockFetcher is: by default, the "open" is used for the entry price. If the "high" of the day exceeds the entry price, by the declared profit stop percentage, then the stop is executed. So, with default settings, your problem scenario will not apply.

With the settings available, it is certainly possible to create situations as you indicate. A perfect example is to set the entry price to "low" and your profit stop will be executed, same day if met. Unfortunately, without time sequencing of high and low intraday prices; it is not possible to prevent this "problem".

We would recommend either keeping with the default entry price settings or place a 1-day minimum holding period to avoid this scenario.

Tom
StockFetcher.com Support




jficquette
22 posts
msg #48768
Ignore jficquette
12/23/2006 10:21:33 PM

I have it set to one day minium hold.

I have the entry set to low of one day ago minus 1 dollar. The entry is a buy. If the entry price is $50.00 and the target price is $51.00 is shows me getting out before I got in.

Stockfetcher assumes that the entry price is hit first even if there is a one day min when the entry and target is hit on the same day.

John




StockFetcher Forums · General Discussion · Problem with backtests<< >>Post Follow-up

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