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Part
I: System Testing
The
System Testing Window
OmniTrader
uses various Trading Systems to generate its signals.
In the System Testing area of your profile, you
can change which systems are being used and the
filters applied to the selection process of systems.
To access
the System Testing window, click on Edit, Trading
Strategy and select System Testing.
The
System Testing window in OmniTrader - Test Parameters
tab
Let's
look at what the three tabs in this window represent:
Test
Parameters: These are the general test
settings for the systems in your profile.
Some of these selections are self explanatory,
but lets clarify of few of the feature boxes in
this tab:
Test Period: This box will control
your profiles test periods. The default
settings are shown above. You can shorten
or lengthen any of these periods. We will
discuss the use of Forward Testing in a few weeks.
The "Update the backtest every _ trading
days" tells you how long it will be before
a symbol is retested in this profile. Remember,
when a symbol retests in OT, it is likely that
the signal will change. Refer to week two's
OT Tip for more on this topic.
Testing Rules: "Don't test symbols
with Signals in the Focus List" will keep
your profile from retesting until the current
trade for a security is stopped out. This
is a good feature to activate if you want to follow
the original signal on a trade candidate until
OT exits the trade on the vote line. "Don't
test symbols with open positions" will keep
your profile for retesting a symbol that currently
has an open position in OT's Portfolio.
"Limit Data to forward and backtest periods"
is recommended if you are using Worden Brothers
(TC2000) data as it will drastically increase
the speed of your testing and charting.
Trade Penalty: During testing, OmniTrader
will apply a "penalty" to account for
commissions and reflect more realistic statistics.
Optimize Based On: When optimizing
a system(finding the best parameters), OmniTrader
can either optimize based on APR calculations
or Net Profit.
The
Test Filters tab in OmniTrader
Test
Filters: Once the systems have been
tested for a symbol, OmniTrader will filter the
systems to find the most accurate ones.
Most of these settings speak for themselves, but
we want to point out the Further Limit Number
of Systems Based On box. OmniTrader will
select the top six systems for each symbol based
on its performance in the backtest. This
is why when you pull up the vote line, you will
only see a maximum of 6 Daily and 6 Weekly systems.
If you see less, then not enough systems passed
the other filters to be considered for the vote.
The
Trading Systems tab in OmniTrader
Trading
Systems: The Trading Systems area tells
OmniTrader which systems to use in your profile.
As you can see, the default selection is for OmniTrader
to test and optimize all of the systems.
This window allows you to Duplicate, Delete and
change the Parameters of any system in your profile.
RECOMMENDATION: If you wish to change parameters
of a system, first duplicate it so that your profile
retains the original parameters of the system
in case you wish to revert back.
The
Force column allows you to force a system
to be considered for vote line. For example,
let's say that you like the signals generated
by the MAC-M system. If you select this
system to be forced, it will be considered for
the signal generation of each symbol in your profile.
This
concludes the first part of our lesson on Trading
Strategy components. We will cover the second
part of the lesson next week. Best of luck
with your trading and send any feedback to jdrake@nirvsys.com.
Regards,
Jeff Drake
Director of Education
Nirvana Systems
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