When you drag in the designer icon into the main historical testing dialog box, a dialog box will appear asking you to enter the number of bars ago value that you want to use. You must also select the indicator you wish to use for testing. After selecting the indicator and clicking OK, the designer testing dialog boxes will appear:
Testing Dialog Box 1:
First, select the time period that you want to use for testing.
You have three choices which you can choose to use individually or combined.
The first option allows you to see if a designer indicator that is greater or less than a certain value.
The second option allows you test for a number of consecutive ups or downs. This will test to see if consecutive designer indicator values are higher or lower than previous designer indicator values. For example, if the entered value is 4 (the default value) and the Num Consecutive Ups checkbox is checked, this condition would be true if the past 4 designer indicator values were 2.3493, 3.6396, 7.5493, and 11.8530. It would not be true if the values were 2.3493, 7.5493, 3.6396, and 11.8530.
The third option you can choose is Above: or Below:. If you choose the Above: option, you are asking Investigator to see if the current bar’s designer indicator value is greater than the number you’ve entered in the Above: edit box. If you choose the Below: option, you are asking Investigator to see if the current bar’s designer indicator value is less than the number you’ve entered in the Below: edit box. You can also select the Just Crossed? parameter.
You can also optionally select the And Then Above/Below: option. If you checked the Above: option, this will test whether the designer indicator has first risen above the Above: edit box value and then dropped below the And Then Above/Below: edit box value within the given number of bars. More specifically, Investigator takes the current bar, subtracts the specified number of bars, moves up one bar, and starts moving forward in time checking to see if the designer indicator of each bar is above the Above: edit box value. If the designer indicator value is above the Above: edit box value, Investigator starts moving forward in time to see if the designer indicator value of a bar is below the And Then Above/Below: edit box value. If this occurs before the current date, the condition is met.
Note that this can happen at any time within the bars specified. For example, if you specify ten bars and the designer indicator value of eight bars ago is higher than the Above: edit box value and the designer indicator value of two bars ago is lower than the And Then Above/Below: edit box value, the condition would be met. If you want the value to have just crossed below the designer indicator value, select the Just Crossed? parameter. If you select both just crossed values, this indicates that you want the price to have crossed above the Above: edit box value exactly the number of bars indicated and then just cross below the And Then Above/Below: edit box value on the current date. For example, if you enter ten bars and select both just crossed values, this indicates that the designer indicator value of the bar nine bars ago must have just crossed above the Above: edit box value and the designer indicator value of the current bar must have just crossed below the And Then Above/Below: edit box value.
The converse of the above two paragraphs applies if you select the Below And Then Above option.
Testing Dialog Box 2:
You can have three or five choices that you can choose to use individually or combined.
If you click on the New High or Low checkbox, Investigator will look for a new high or low within the number of bars that you specify. You must also specify the time period that you wish Investigator to search for the new high or low. For example, if you want to see if a designer indicator has made a new high on the current bar for the entire chart, you would click the New High checkbox, enter 1 in the Within edit box, and then click the All Bars checkbox. If you want to see if a designer indicator has made a new low within the past 5 bars over the last trading year (roughly 250 trading bars, assuming you are looking at a daily chart), you would click the New Low checkbox, enter 5 in the Within edit box, and then enter 250 in the Over Past edit box.
Another option you can choose is Divergence Up or Down. If you select the Divergence Up or Down option, you must enter the number of bars that you wish Investigator to check for the divergence.
If you select the Average Over Past: option, Investigator will calculate the designer indicator average over the number of bars that you specify; otherwise, Investigator will use the designer indicator value of the current bar. We will call this calculation average 1.
If you chose the Current Bar option, Investigator will calculate the designer indicator average over the past number of bars specified in the Than Over Past: edit box, excluding the current bar. If you chose the Average Over Past: option, Investigator will calculate the designer indicator average over the past number of bars specified in the Than Over Past: edit box, including the current bar. We will call this calculation average 2.
Investigator will take the average 2 calculation and multiply it by the percent value indicated in the Percent: edit box. If you selected the Higher option, Investigator will add this value to the average 2 calculation; otherwise, it will subtract this value from the average 2 calculation.
Investigator then does a comparison of average 1 and 2. If you selected the higher option and the average 1 calculation is greater than the average 2 calculation, then this condition would be considered to be true. If you selected the lower option and the average 1 calculation is less than the average 2 calculation, then this condition would be considered to be true.
For example, let’s say you entered 2 in the Average Over Past edit box, selected the higher option, entered 6 in the Than Over Past: edit box, and entered 50 in the Percent: edit box. Assume we have the following designer indicator values:
Bar 1: 1000
Bar 2: 2000
Bar 3: 3000
Bar 4: 4000
Bar 5: 5000
Bar 6: 6000
In this case, the condition would be considered true:
Average 1 Calculation:
5000 + 6000 = 11000
11000 / 2 = 5500
Average 2 Calculation:
First find the average:
1000 + 2000 + 3000 + 4000 + 5000 + 6000 = 21000
21000 / 6 = 3500
Get the percent multiplier:
50 / 100 = .5
Multiply the average calculation by the percent multiplier:
3500 * .5 = 1750
Since the condition is higher, add the above value to the average:
3500 + 1750 = 5250
Comparison:
Since 5500 > 5250, the condition is true.
If you are using a designer indicator as an exit condition, two more testing options appear.
You can use a designer indicator as an Open Market Stop, which is a price at which you wish to exit a trade, assuming the trade goes against you.
You can also use a designer indicator as a Target Profit, which is a price at which you wish to exit a trade, assuming the trade goes in your favor.
Testing Dialog Box 3:
You have two choices which you can choose to use individually or combined.
The first option you can choose is Price Above Indicator or Price Below Indicator. If you choose the Price Above Indicator option, you are asking Investigator to see if the low of the test day is greater than the designer indicator value. If you choose the Price Below Indicator option, you are asking Investigator to see if the high of the test day is less than the designer indicator value. You can also select the Just Crossed? parameter.
You can also optionally select the And Then Price Above/Below Indicator Within option. If you checked the Price Above Indicator option, this will test whether the price has first risen above the designer indicator and then dropped below the designer indicator within the given number of bars. More specifically, Investigator takes the current bar, subtracts the specified number of bars, moves up one bar, and starts moving forward in time checking to see if the low of each bar is above the designer indicator value. If the low of a bar is above the designer indicator value, Investigator starts moving forward in time to see if the high of a bar is below the designer indicator. If this occurs before the current date, the condition is met.
Note that this can happen at any time within the bars specified. For example, if you specify ten bars and the low of eight bars ago is higher than the designer indicator and the high of two bars ago is lower than the designer indicator, the condition would be met. If you want the value to have just crossed below the designer indicator, select the Just Crossed? parameter. If you select both just crossed values, this indicates that you want the price to have crossed above the designer indicator value exactly the number of bars indicated and then just cross below the designer indicator value on the current date. For example, if you enter ten bars and select both just crossed values, this indicates that the low of the bar nine bars ago must have just crossed above the designer indicator and the high of the current bar must have just crossed below the designer indicator.
The converse of the above two paragraphs applies if you select the Price Below Indicator option.
The second option you can choose is the Prices Touches Indicator option. If you select the Prices Touches Indicator option, Investigator will see how many times the designer indicator value is greater than or equal to the low and less than or equal to the high of the bar. For example, if you enter 6 in the For edit box and 10 in the Over Past edit box, if there are at least 6 bars out of the last 10 bars that “touch” the designer indicator value, the condition would be met.