Even though QiT uses 100% algorithmic trading, and does not utilize any discretionary override, we still recognize the advantages built into the discretionary trading model. Thus we continuously monitor for system health and optimize algorithms with optimization techniques.
The idea behind an optimization is simple. First, you have to have a trading system, this may be a simple moving average crossover for example. In almost every system there are some parameters (as an averaging period) that decides how a given system behaves. Optimization is the process of finding optimal values of those parameters (giving highest profit from the system) for a given symbol (or a portfolio of symbols).
AmiBroker is one of the very few programs that allow you to optimize your system on multiple symbols at once.
To optimize your system you have to define from one up to ten parameters. You decide what is a minimum and maximum allowable value of the parameter and in what increments this value should be updated.
AmiBroker then performs multiple back tests the system using ALL possible combinations of parameters values. When this process is finished AmiBroker displays the list of results sorted by net profit. You are able to see the values of optimization parameters that give the best result.
Automatically get performance data
Optimizing a trading system in Amibroker allows us to back-test our chosen stock, or group of stocks to see if our method works. But further to this, in Optimizing our trading system we automatically get performance data on a large range of different parameters so we can choose the best combination of rules to use. This optimizing process often takes only a few minutes.
Let’s say we are using a simple Moving Average crossover system, where we buy when the 25 Day Moving Average crosses above the 100 Day Moving Average.
We back-test our results, and the results are OK. Nothing stellar.
But then we use a simple “Optimize” command, we can also test the Moving Averages between 0 and 200 to see which Moving Average works best. The results are finished within minutes, and we can instantly see that there is a better Moving Average combination we could be using.
We stay current
This way we are able to stay current and adapt to market changes.
QiT models the price, volume, and other technical analyses in a way that gives a huge edge over discretionary trading. An edge we can quantify with backtesting. An edge you can see with your own eyes.
Each night, before trading starts the next day, Amibroker scours the entire US stock market for setups. Signals are stocks that meet our criteria because they signal a trade with the highest probability of winning. But we don’t stop there. We then use another filter to rank all the signals and only trade the best of the best. Once again, we don’t stop there! Each signal we trade then uses a limit order to turn a very good trade into a great trade.
We’re the Plan in “Plan your Trade and Trade your Plan” TraderJanie
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