The test parameters dialog box contains the following items:
Find Trades That Return ___ Times Risk
The value that you enter in the edit box will be used in a risk / reward calculation. Assume you enter 3 in this box (the program default). This tells Investigator that you want to know how many trades return three times the amount of money risked on the trade. The risk factor is the initial stop loss value. If you have more than one exit condition on the trade, Investigator will use the stop loss that is closest to the entry value. The potential reward value is the profit on the trade.
For example, let’s say you bought one share of stock at $100, the closest stop loss is at $90, and you exited the trade at $130 or above. This trade returned 3 times the amount you are risking, since you are risking $10, and your profit is $30 or more. This option does not mean that Investigator will tell you how many trades made a 300 percent return.
Stop Log After ___ Entries / Log All Trades
These two options will generate a log file that contains individual trade information. If you use the Stop Log After option, only the number of entries that you specify will be logged. It is recommended that the first time you test a system you log only a small number of trades until you find out how many trades the test discovers. Some tests will find thousands of trades, generating a huge log file. If this occurs, don’t be alarmed as the log file will be written over with your next historical test. If you wish to log all of the trades that Investigator finds, click on the Log All Trades option and make sure the Stop Log After edit box is empty.
Start On Bar:
If this box is checked, Investigator will not start testing a financial instrument until the entered bar is reached. The program default is 200. There are two reasons you would check this box: New issues tend to make rapid price swings which can skew the results of your testing, and some indicators work better after they have been run over some data.
Overlap Trades
With this option checked, Investigator will enter new trades in the middle of an existing trade. For example, suppose we enter a trade on May 1 and exit the trade June 1. Without this option checked, Investigator would start to look for new trades on June 2. With this option checked, Investigator would start looking for new trades on May 2.
If you don’t like Investigator’s default values for the above options, change the dialog box so that the options and values you prefer for testing are shown and then click the save button. These options will then be the defaults when you test again.
Check If Testing Futures
Since futures don’t have a one-to-one correspondence between tic change and price change (in other words, one tic does not equal one dollar or cent, as in equities), Investigator provides a convenient futures lookup table for each future, so the program will give you accurate testing results. With this option checked, Investigator will look up each symbol it tests to see if it is a future, and if it is, it will apply the appropriate price information to that future. With this option checked, if Investigator cannot find the symbol, it will not test the symbol. If you are not testing futures, you should not check this option, since it slows testing down slightly. If you are testing futures, be sure this option is checked and make sure all of the futures you are testing are in the futures lookup table. You can do this by using the Special…Futures…Check Symbols menu option.
Once you click OK, if you have checked the Testing Futures option, you will progress to the Testing dialog box; otherwise, you will progress to the Capital Management Parameters Dialog Box.