The Summary Tab gives you a detailed insight into the performance of your strategy.
The Profit Factor is calculated by dividing the sum of all profits by the sum of all losses. If the Profit Factor is greater than 1, the strategy has generated a profit. If it is below 1, the strategy has generated a loss. Most traders aim for a strategy with a Profit Factor of 2 or more.
The Summary Tab displays the total number of trades performed in the backtest and the Win Rate in percent.
You can compare the Average Winner versus the Average Loser and see the Strategy Return as well as the Projected Annual Return.
The fields that result in a positive outcome are displayed in a shade of green, the fields that are problematic are displayed in shades of red. Lighter green shades equal smaller profits. Darker green shades equal larger profits. The same is true for the strategy being unprofitable, which is displayed in lighter and darker shades of red.
The Summary Tab displays the Buying Power that the strategy required during the backtest.
You can define the amount of Starting Equity based on your account size. This amount affects the strategy return and the projected annual return. If the required Buying Power is greater than four times the Starting Equity, which is the leverage most brokers allow, the Starting Equity field will turn red.
You can base your Position Size on Dollars per trade or Shares per trade. Select dollars if you typically buy the same number of shares, regardless of price. Select percent if you typically buy a specific dollar amount, regardless of the number of shares.
You can also factor in the Commission that your brokerage charges per trade as well as per share.
The small Calendar on the bottom left-hand side of the Oddsmaker Results Window displays the daily performance of the strategy. Each day is color-coded. If there were no trades, the background would be white. If the trades were overall profitable, the day would appear with a lighter or darker shade of green. Lighter shades equal smaller profits. Darker shades equal larger profits. The same is true for losing days which appear in shades of red.
Hover your mouse over a day to see more details, including the Win Rate in percent and by the number of trades, the total Profit for the day, as well as the Average Gain. While you hover, the section of the Equity Curve, the Daily, the Drawdown, and the Buying Power for that day will be highlighted.
If a multi-day strategy is backtested, the checkbox Use Exit Date is shown below the calendar. By default, the calendar day will show the trades that were entered on that day. Checking this option will reload the calendar and show the exited trades instead.
Double-click on a calendar day to open the Oddsmaker Trades Window, which provides detailed information about the Symbols traded, the Alert Type, the Entry and Exit Time for each trade, the Entry and Exit Price for each trade as well as the Share Size and the Gross Profit.
Below the calendar, the numbers and dates for the Most Winning Days in a Row, the Most Losing Days in a Row, as well as the Biggest Winning Day and the Biggest Losing Day, are listed.
The Equity Curve shows the change in your total equity over the simulation period. Most traders are looking for a smooth, upward-sloping equity curve. Oftentimes a look at the equity curve can identify problem areas that might not be obvious by looking only at the metrics. It clearly shows you the dips and, herewith, the possible pain you might feel during losses. A good Equity Curve has a 45-degree straight angle without deep dips. The curves also make it easy to see the effect that commissions have on the strategy. The lighter green curve shows the Net Equity, including Commissions. The darker green curve shows the Gross Equity.
Whenever you adjust your starting equity, the position size, or the commission, the equity curve will adjust accordingly.
The Daily Graph shows you how much profit or loss you would have made each day with this strategy. The x-axis displays the day. The y-axis displays the Profit or Loss in Dollars. Green shows a profitable day, red a losing one. The section below is displaying the number of Trades per Day. If you hover over the small calendar on the left-hand side, the day’s section in both graphs of the Daily Tab will be highlighted. As a trader, you would like to see continuity between winning and losing days.
The Drawdown Graph provides insight into the downside risk over the simulation period. Large drawdowns are what makes traders quit trading. While there is no way to completely eliminate drawdowns, you should understand what kind of drawdowns are likely and size your positions accordingly. If your strategy never lost a penny, the drawdown would be zero percent and reside at the level indicated by the red line.
Buying Power Graph
The Buying Power Graph shows the maximum buying power required throughout the simulation period. Strategies that hold many simultaneous positions will require more buying power. This graph can help you determine how much money you would need to allocate to trade every signal that appears. It is showing you how much buying power you would require if you wanted to be in every single trade, even on the busiest day.