Testing Model

Testing Model parameters on the Backtest Strategy page can be used to specify when a position must be added to the trading portfolio. It suggests three options: Close prices, Next day open, and Next day if. If the parameter is set to Close prices, the position is added to the portfolio with an entry price equal to the close price at which the stock matches the criteria. In case of the Next day open value, the position will be added with an entry price equal to the next day's opening price:

The trading simulator generates signals using closing prices only. However, market entry may be deferred if the Next day open or Next day if model is selected. The criteria for closing a position are also checked only by closing prices, and market exit may be deferred if the Next day open model is selected.

A position can be opened within the day/bar only if the Next Day If model is selected. A position can be closed within the day/bar only using a stop loss, trailing stop loss, or take profit level. A vacant place in the portfolio can be taken by a new position only at the closing of the trading session.

For intraday periods, the backtester works using the closing prices of the corresponding periods (bar closing prices). For example, if you use hourly periods, the backtester will enter the market at closing prices of hourly periods. Intra-hour price movements will not be taken into account. In other words, hourly periods are used identically to the daily period, with the only difference being that in the first case, one bar is one hour, and in the second case, one bar is one day.