Optimization facility is another useful feature needed to specify certain trading conditions in regard with the chosen strategy, such as period, start and finish dates of optimization, period, start and finish dates of back testing, period of back testing, shortest and/or longest and/or average trading span (difference (in bars) between purchasing a security and selling it), commissions, margin rates and other important trading strategy parameters. The user can now back test the trading strategy using wide array of back test specific parameters and see its performance history.
Generally speaking, optimization techniques examine all possible combinations of indicators and parameters trying to find out a best model (an optimal model).
And another significant feature of the trading software is an Optimization Facility. In general, optimization techniques attempt to take into account all relevant trading data and trading parameters available on a current vastly developed marketplace. The goal is to generate Buy/Sell signals by taking as input all relevant trading information, data, parameters and indicators, and selecting only those of them which produce most accurate predictions of security’s price movement.
After sufficient amount of back testing, the user can either let the system go “live”, i.e. let it generate real-time Buy/Sell signals on stocks in the portfolio or to engage in a Paper Trading activities. Paper Trading means that automatic order feature emulates sending orders (automatically and, completely, without human intervention) according to the chosen trading strategy to computerized exchanges and receiving confirmations of executed orders but real money is not invested. Paper Trading provides an opportunity to test trading strategy performance in real-time. Another possible use of Paper Trading is to consider and to evaluate different execution alternatives offered by our system against real-time market conditions (detailed explanation on different execution alternatives is presented later in this document). After sufficient amount of back testing and/or Paper Trading, the user can use the system to transfer automatically real-time Buy/Sell orders on securities in the portfolio to computerized exchanges