Backtesting Using (Google) Spreadsheets and SwingTradeBot
I had a really good email exchange with somebody (Jason) the other day. He shared with me how he incorporates SwingTradeBot's data into his research process. Here's part of our exchange:
Thanks for Swingtradebot, I've been a subscriber now since April and have found it quite useful. One of the things that has helped me become a better trader is using the combo scan to identify a list of stocks based on the setups from the Hit and Run Trading book, and sticking to that list to choose an opportunity for the following day.
That intrigued me, so I asked him to tell me more. Here's his response:
For me, looking back at the history of various scan results is more of a fun way to pass the time while seeing how stocks have responded after giving various signals. As you know, the results show %Change, Volume, and Vol. Surge for a particular day of the scan. Based on that data along with the stock's industry I try to determine which stock would be the best choice for the next day(s) given the current scan combination. I then simply copy and paste that data into a Google spreadsheet where I can then use the =GoogleFinance formula to show me price data on the stocks in the scan results for that day (highs/lows/close, etc.) I then review the chart to see how the trade would have played out. It's all a 'What If' game, but has let me glean a lesson or two in how certain stocks/setups are most likely going to play out without risking anything.
Example: (the bold highlighting is the choice for that day and is done before filling in final price data, this example shows good momentum selections for early October based on the Expansion Pivot Buy and New 52 wk Closing high combo)
I love the fact that Jason is will to put in some work to optimize his trading results. I get so many messages which are basically asking me: "What's the best signal?" My answer is always: "It depends. There are so many variables involved... and even if I had an answer that applied to my trading, it probably wouldn't apply to your trading style & rules..."
Here's a copy of the spreadsheet. Feel free to copy it to your own Google Spreadsheets account and tweak it as you see fit. Hopefully it will spark some ideas for you.
This exhange also got me thinking about some things I could add to the site to help people do that kind of research / backtesting. I've put that on the back-burner for now (I have so many other things to add to the site first) but I'll return to that idea early next year.