Backtest Investment Strategy Optimizer allows users to define buy and sell interval based trading patterns and apply them to real historical stock quote data to determine potential profitability of trading strategies. Configurable parameters include buy interval, sell interval, percent gain/loss triggers, transaction fees, investment amount, and more.

Its easy...first build a holdings and/or reserve portfolio adding stock ticker symbols to the entry field.   Backtest Investment Strategy Optimizer fetches real hisorical data from the web. Then, set trading parameters, time span and run the strategy to reveal the outcome.  A transaction log records trades and trade logic.  Statistics are reported to show which securities performed best.

Backtest Investment Strategy Optimizer runs on Windows 7 and  XP operating systems and best viewed in 1600x900 resolution. An internet connection is required for building strategies and for viewing the online help.

How to use Backtest Investment Strategy Optimizer
After Backtest is installed and launched you can load a sample strategy or build one of your own using the Build textbox.  After all desired securities have been added to your portfolio you must configure a custom trading strategy, or proceed with the default trading parameters provided with the software.  Following configuration of your desired trading strategy you can run the strategy to simulate the outcome. 
  
Build a Portfolio
To build a portfolio, select the desired amount of Cash to begin trading with.  Then place the cursor in the Build textbox and type ticker symbols seperated by commas.  Pressing the Holdings button will add the security to the holdings table and fetch all historical daily close data for each symbol listed.  Pressing the Reserve button will add the security to the Reserve table and fetch all historical data for each security listed.  The Holdings table represents all stocks currently owned, while the Reserve table represents all stocks that are considered for purchase.  Although some securities may be present in the Holdings table it is possible to purchase more shares of that security.

Configure the Trading Parameters
A strategy is configured from the Configure groupbox.  Additional parameters can be set from the Configure form, which is activated by hovering the mouse pointer over the (more) hotspot.  The Configure form will automatically close when the mouse crosses the edge of the form.

Date Pickers - When stocks are added to Holdings and Reserve tables the Start Date and End Dates are automatically set to simulate the most recent 6 month period.  This term can be changed using the respective date pickers.  Date pickers will be restricted to days with closing data.  Pressing the Auto Configure dates button will restore the simulation term to the most recent 6 month period.

Cash Value - This value is set by the user prior to running the simulation and represents the amount of Cash the simulation will begin with.  While the strategy is running the cash value changes as a result of buys and sells and is included in the Current Asset Value.  The Initial Asset Value may change during configuration of the strategy but is frozen when the Run or Step button is pressed, and is used as a baseline for measuring gains.

Transaction Fee - This dollar value represents the brokerage fee applied to each buy and sell transaction.

Minimum Purchase - This dollar value defines the minimum amount that will be considered for purchase of any given security.  For example, if only $800 of cash is available and the Minimum Purchase value is $1000, then no securities will be bought.

Bid Compromise - This ratio value (%) can be used to bias the price paid for all transactions to reflect the added cost per share necessary to acquire all desired shares af any given secuity.  For example, if only 40 shares of MSFT are available at the asking price of $30 per share, it may be necessary to pay $30.50 per share to acquire the desired number of shares needed to fill the Investment Amount.  In this case you would set the Bid Compromise value at 1.6%.  Leaving this value at 0 assumes that the desired number of shares are availabe for purchase at the day's close price. 

Ask Compromise - This ratio value (%) can be used to bias the price paid for all transactions to reflect the reduced cost per share necessary to sell all desired shares af any owned secuity.  For example, if only 40 shares of MSFT are available at the bid price of $30 per share, it may be necessary to drop the price per share to 29.50 to sell all shares of MSFT.  In this case you would set the Ask Compromise value at 1.6%.  Leaving this value at 0 assumes that sufficient demand always exists to execute the sale of all desired shares of a security. 

Minimum Drop - This ratio (%) is the amount a securities close price must drop by over the period of the Buy Interval in order for strategy logic to consider to buy it.  For example, lets assume the Buy Interval is set at 14 days and the Minimum Drop is set at 5%.  If MSFT is a member of our portfolio (in the Holdings or Reserve table), and the close price has dropped by 5% in the most recent 14 days then strategy logic will buy (or buy more of) MSFT stock. 

Minimum Gain - This ratio (%) is the amount a securities close price must rise by over the period of the Sell Interval in order for strategy logic to consider to sell it.  For example, lets assume the Sell Interval is set at 14 days and the Minimum Gain is set at 5%.  If MSFT is a member of the Holdings table (we own it), and the close price has risen by at least 5% in the most recent 14 days then strategy logic will sell all shares of MSFT stock and apply the proceeds to Cash Value.

Maximum Loss - This ratio (%) is the maximum amount a security we own can drop in price before the strategy logic executes a sale of that security.

Minimum Holdings Size - When securities are acquired into the Holdings table, the Minimum Holdings Size value (integer) is examined prior to selling any holdings.  For example, if the Minimum Holdings Size is 4 and only 4 stocks remain in the Holdings table, then strategy logic will not sell any more stocks even if all other sell criteria are met.  This parameter can be used to ensure a portfolio's diversity.

Buy Interval - This value (integer) represents the number of days previous to the current trading day that a drop in close price is measured from while examining buy criteria.  For example, lets assume the Buy Interval is set at 14 days and the Minimum Drop is set at 10%.  Examining buy criteria each day, if the close price of MSFT drops more than 10% over the last 14 days then strategy logic will buy (or buy more of) MSFT stock.

Sell Interval - This value (integer) represents the number of days previous to the current trading day that a gain in close price is measured from while examinging sell criteria.  Fore example, lets assume the Sell Interval is set at 30 days and the Minimum Gain is set at 15%.  Examining sell criteria each day, if the close price of MSFT rises more tan 15% over the last 30 days then strategy logic will sell all shares of MSFT stock.

Measuring Gains - Two modes are available for measuring gains (or losses).  The default mode is from the previous close price. In this mode all gains are measured from the close price at the beginning of the buy/sell interval to the current trading day's close price.  Another option is to measure gains from the purchase price.

Reinvestment Amount - This is the amount, Fixed ($) or Ratio (%), that will be used to buy the next lot of stock.  If Ratio is selected, then strategy logic will take the user specified percent of remaining stock for the next purchase.  Otherwise the strategy logic will take the specified fixed dollar amount from cash for the next purchase.

Long Text Mode - If Long Text Mode is checked then all trade logic will be shown in the transaction log.  If unchecked, only Buys and Sells will be shown in the transaction log.

Running the Simulation
Running the simulatin is easy.  Once your strategy is configured, press Run and watch the strategy go to work for you.  While viewing the Holdings or Reserve tables you will see stocks appear and disappear as the strategy logic executes trades based on your parameter settings.  The performance box will show how effective your strategy would be as indicated by gains or losses. 

Pressing the Step button allows the user to step through the strategy day by day.  This is useful for verification of trade logic.

At the end of the trading term statistics for each security can be viewed from the Statistics tab to learn which securities were traded most often.