About the Back-tester

·         You can only buy a whole number of shares.  This means you will often have cash left over after opening a trade. This cash is available for use next time.   If you use a low deposit with high-priced shares, the statistics will not accurately reflect the power of the Hawkeye. To test indices such as the XJO or Down Jones, we recommend using a deposit in the hundred of thousands.

·         For each long trade you invest all your available cash.  This gives an idea of the compounding power of Hawkeye. However, where Hawkeye is back-tested over a number of years, the transactions amounts end up huge – far more than most people would use for a single stock.

·         For each short trade, you short to the value of your available cash. Once again, this gives a good idea of the power of shorting, but is not necessarily a strategy that most people would employ in real life.

·         You actually get the price at which the arrow appeared. Once again, this is an idealised situation. We cannot simulate, for example, a situation where an on-line broker’s systems crash for an hour or so.

·         Purchases do not affect the share price and you can purchase all the shares you want, at the price calculated in the simulation. Clearly, this is not true for every instrument. Be careful back-testing illiquid, closely held stocks.

The System Tab shows the signals generated by the system and the dates and prices at which these signals occurred.

The Simulation Tab shows the simulated transactions based on the signals shown on the System Tab.

The Graphs Tab has two parts. In the top section is a line chart of the stock (BHP in this case) with the signals marked. OL – Open Long, CL – Close Long, OS – Open Short, CS – Close Short

The lower section shows three lines. The Pink line, the “Risk_Free_Return” represents the returns gained from investing at a fixed interest rate. This might be a bank account or a Cash Management Trust, for example.

The green line – “Buy_And_Hold” represents the returns obtained from buying the stock at the first opportunity, and keeping it – whatever the market does. In this case, the stock was bought on the first day for which there was data – 7-Feb-2006.

The blue line “Assets_04” represent the returns obtained by using the system. Returns are only calculated while the money is in the market. The calculation does not take into account any interest earned by the money while it lies in the bank or cash management trust between trades.

The “Positions” Tab shows the results of the simulated trades.

The "Compare" function allows you to compare the results of applying the system to a number of securities. To compare between different securities the "Sync" function is applied to a selected watchlist. For a complete FAQ on using and applying the "Sync" function click here (opens in a new window).

For a complete FAQ of Gryphon's new BACKTESTER including notes on use, accuracy, definitions, parameters and getting access please click here(opens in a new window).

Click here learn how to start the Back-tester