Overview
The Overview tab graphically presents account equity, drawdown, and buy & hold equity, and provides essential backtest data for easy optimization.
Last updated
The Overview tab graphically presents account equity, drawdown, and buy & hold equity, and provides essential backtest data for easy optimization.
Last updated
The Overview tab includes graphical representations of account Equity, Drawdown, and Buy & Hold Equity over the backtested period. These can be displayed together or individually by checking the display boxes at the bottom left of the panel.
Data in the Overview tab can be used to quickly optimize strategies. More detailed backtest data in the Performance Summary and List of Trades tabs is used to 'fine-tune' optimization.
Total account Equity across the backtested period is graphically displayed. The Equity line represents Net Profit across the backtest period. Absolute and percentage Net Profit are relative to the Initial Capital, Order Size, and Commission specified in the Properties Settings. Total Equity is measured on the lefthand scale of the Overview chart.
An Equity line that rises smoothly and outperforms Buy & Hold Equity is generally desirable. See the Strategy Optimization section for details.
Graphically displays the Drawdown on each trade across the backtest period. Drawdown is measured on the righthand scale relative to the highest Net Profit of a strategy. Individual trades can be identified horizontal scale and examined in the List of Trades tab.
Generally, Strategy Optimization should aim to increase Net Profit and limit Max Drawndown. A strategy susceptible to large drawdowns presents a greater risk. Individual trades that result in a large drawdown should be examined to inform Strategy Optimization. Risk management elements such as Stop Loss, Trailing Stop Loss, Take Profit, and Scaled Exits should be employed to protect account Equity from drawdowns.
Note: 'Drawdown' listed in the Pro Trader Calculations Table Gross Loss in the Pro Tester. See the Calculations Table Comparison section for details.
Buy & Hold Equity represents the account equity had the asset been brought at the beginning of the backtest period but not traded.
The Equity on an effective strategy should exceed the Buy & Hold Equity.
Overall profit or loss achieved across trades. Maximizing Net Profit and minimizing Max Drawdown is a primary aim of Strategy Optimization.
Net Profit is measured relative to the Initial Capital specified in the Properties Settings. Profitability data is also calculated according to values specified in the Order Size, Commision, and Base Currency settings.
Changes in Net Profit over the backtest period are represented by the Equity line.
The total number of trades closed over the backtested period.
Percentage of winning trades. A strategy with a high Percent Profitable value will return a high Net Profit if the Avg Trade value is high, and Risk Management is applied secure profit and limit losses from Drawdowns.
A strategy with a low Percent Profitable can also return a high Net Profit if Risk Management is applied effectively.
Gross profit divided by gross loss. A Profit Factor <1 means a strategy is sustaining more loss than profit. A Profit Factor >2 is desirable.
Increasing the Profit Factor of a strategy is a primary aim of Strategy Optimization.
The greatest drawdown across the backtest period relative to the highest Net Profit.
Generally, Strategy Optimization should aim to increase Net Profit and limit Max Drawndown. A strategy susceptible to large drawdowns presents a greater risk.
Risk management elements such as Stop Loss, Trailing Stop Loss, Take Profit, and Scaled Exits should be employed to protect account Equity from Drawdowns.
Reducing Max Drawdown and managing risk is part of improving the 'risk performance' of a strategy. Risk performance, or risk-to-reward ratio, is measured by the Sharp Ratio and Sortino Ratio in the Performance Summary tab.
The average profit per closed trade. A high Avg Trade value is desirable to adequately reward the risk associated with each trade.
Increasing the Avg Trade of a strategy is a primary aim of Strategy Optimization.
The average number of periods elapsed per trade.
Increasing the period positions remain open and appropriate use of Risk Management can increase Sharp Ratio and Net Profit.
