Backtesting “Investopedia simulator” strategies - YouTube

Backtesting “Investopedia simulator” strategies.

“Paper trading” with stock market simulators is an excellent practice experience for rookies

and young finance students wanting to become traders or better, hedge fund managers.

Never consider trading stocks with your hard-earned real money before having at least a 6 Months

practice experience of trading with fake money, despite the “small”??? expected differences

between paper and real trading.

The most difficult question a trader asks himself everyday while getting out of bed

is: what stocks to buy today.

The DSS or DailyStockSelect.com attempts to answer this question by daily providing, when

possible, a diversified list of stocks to trade.

However, perhaps the best way to daily stock picking starts with backtesting several strategies

in order to follow the best one at the end, that is the one that leads to the highest

gains.

Investopedia and DailyStockSelect provide the stock simulator and the market research

tool, respectively.

Make sure you are registered with both sites, for FREE and have activated accounts.

Warning, the DSS's backtesting IS actually FREE without registration, but you need to

be registered in order to get daily forecasts.

Start first with backtesting several trading strategies with the DSS.

Go to Services/backtests, then choose the parameters that suit you and hit “Run”.

Repeat this procedure until you find a good strategy that beats the market over the period

of time of your choice.

You need to use 25 to 30 dollars, instead of the default 8 dollars trading fees, Investopedia

assumes an expensive brokerage even tho new services are getting cheaper and cheaper.

I used to pay 1 single dollar per trade on one of the online trading platforms.

Remember to save each strategy under a specific name in order to easily reuse it later for

obtaining daily forecasts.

You may also want to save the whole portfolio table of that strategy by pressing Control

plus S (in order to save the whole html page) or take a screenshot of the figures and table,

since the DSS doesn't allow for exporting outputs yet.

In order to learn more about how to Run backtesting on the DSS servers watch the following video

on YouTube: “Backtesting trading strategies with Artificial Intelligence (Machine Learning)”.

You may wanna also watch other videos on our channel before engaging into investopedia

+ DSS trading.

Now that you have a saved chosen strategy, you can use it in order to daily obtain new

forecasts, according to it.

Every open market day, go to Service/forecast on the DSS website.

Click on your strategy name under “Saved parameters” on the right panel.

The DSS will automatically fill the corresponding parameters.

Then hit Run.

After this either you will find new stocks to buy, or the DSS will tell you that there

are no stocks selected according to your strategy on that specific day.

When you have new stocks selected for a long position, login to Investopedia then click

on Simulator.

Click on Trade.

Enter the stock symbol.

Enter the desired quantity.

Click Buy.

Remember that every strategy on the DSS comes with stop-loss and target gains percentages.

You need to place a stop-loss order by clicking on the “Sell” or “Trade” buttons.

Check the proper box and enter the stop-loss price.

If your stop-loss percentage is -1%, then your stop-loss price is 0.99 times your buy

price.

Concerning the sell price, the matter is different.

Rather than limiting your gains to the target-gain percentage, you can leave it open for higher

prices.

But you are free to either use the target gain as a second order or, which is recommended,

to put a price alert, using one of the online free services like yahoo-finance alerts, that

lets you know when the stock price crosses the target-gain.

When you receive a “target-gain” alert, instead of immediately selling, wait till

the closing hour, that is 4 pm, then sell at the closing price.

Keep daily buying and selling stocks over the same period of the backtesting.

6 Months to 1 year should be reasonable for backtesting.

At the end of your trading period, you can do the final step that evaluates your trading

skills.

Rerun a new backtesting, over the same period of time you have been trading.

This will give you the ideal gain you should have accomplished over the same time.

This should be a valuable experience for your portfolio management skills.

So to summarize, in order to use the DSS market research tools with the investopedia simulator

you need to: 1.

Have active accounts on both sites.

2.

Research on the DSS for the best parameters that lead to maximum gains via Backtesting.

3.

Save the chosen set of parameters. 4.

Get daily customized forecasts from the “Your Forecast” page, using your saved parameters.

5.

Buy your recommended stocks on Investopedia simulator.

6.

Set stop-loss (for example -2%) automatic sell.

7.

Set target gain alert using yahoo finance.

8.

When the price of your stock reaches your target gain price (for example 5%), either

sell immediately or wait until the closing- hoping for even higher gains.

9.

After a certain trading period (6 Months for example).

10.

Redo backtesting according to your same saved strategy in order to see how well your Investopedia

portfolio has performed, relative to an ideal portfolio.

Good luck and I wish you plenty of gains!

Remember to “Like” and “Share” this video and to subscribe to our YouTube channel,

called “DSS traders”, in order to follow our future videos.

All comments, criticism and suggestions are welcome below.