There seem to be thousands of options for backtesting! Yesterday I ended up in the “backtesting” area of OANDA, called the algo lab “Quant Connect”, and by god it was confusing in there.
Is there a general consensus about what is the best method in terms of software choice / environment to do this in? I’ve always done it manually, which is so slow and gives very little info and is error prone. Then lately I’ve moved to Pine Script in tradingview which is just killing me, as the language is not in my view very well documented.
Is it just a question of shelling out for Forex tester 4, and all of my issues will be sorted? I’m willing to buy a PC if thats what it takes.
It all depends on your particular needs and purposes. Thus, it would be great to try different backtesting tools to find out one that fits best the issue you want to solve.
Forex Tester 4 is quite new, so there are no details about it yet. At the same time, its predcessor, Forex Tester 3, is one of the most popular tools for backtesting, so it seems that new edition will gain the same popularity. To my mind, it will be the best solution for most of the cases for the following reasons:
it has built-in data download manager, so you will no longer need to search across the internet to find historicable data in sutable format. Depending on the instrument you may even have a choise between data provided by different brokers (if the broker you are trading with is in the list of data providers, the accuracy of backtesting will be higher).
multiple timeframe testing - sometimes the strategy can generate entry points on different timeframes, so for example if you use exclusively 5M, you would probably miss entry point appearing on 1M. That is why it is very important to have possibility to perform testing on several timeframes simultaneously.
its interface is quite simple and user-friendly - its appearance is very close to MT4 terminal, so it is quite easy to get familiar with it.
So, you can start with outlining your needs and then trying different tools to choose the one.
well, in my opinion, TradingView works for backtesting with the “replay” mode, but I was never able to figure out how to switch between timeframes while in replay mode. Every time I switch timeframes on a pair it always defaults back to current price. I recently found out about a site called forexthrive.com that is awesome to me, but it seems that EU is the only available pair. But, maybe I have to play around with the site to figure out how to access the other pairs, if available