Backtesting multiple markets simultaneously has several benefits.
The short version is time-saving and can be tested based on market correlations.
This process is similar to backtesting multiple time frames simultaneously, but requires some additional setup.
Backtesting multiple markets is easy with automated strategies.
Simply run trading programs on data from different markets.
But it’s not easy to see multiple markets at the same time Manual Testing.
This quick tutorial provides the benefits and downsides of backtesting multiple markets of manuals, as well as how to do it accurately.
Benefits of backtesting multiple markets simultaneously
If you already know the benefits of backtesting across multiple markets, skip to the setup section.
But if you’re not sure why to do that, here are the top two reasons.
Save time
First, testing multiple markets can save you a lot of time.
Let’s say you want to manually backtest EURUSD and S&P500 trading strategies at the same time.
Furthermore, let’s say it takes two days to test each market individually.
Run both charts at the same time and trade on both charts, it only takes 2.5 days to test instead of 4.
This is a huge advantage.
See Market Correlations
Another reason to backtest multiple markets at the same time is to check market correlations.
For example, the one I often talk about correlation is between cadjpy and oil.
Canada is a major oil exporter and Japan imports all oil, so oil prices could affect each economy accordingly.
As always, don’t look at my words. Backtest yourself.
There are many other market dynamics in terms of currency prices, so oil prices may not always have the biggest impact.
However, if you want to test this, it can be difficult to see the correlation (or lack thereof) if you are backtesting one market at a time.
This becomes easier by lining up both charts.
Disadvantages of backtesting multiple markets simultaneously
But backtesting multiple markets is not all sun and unicorns.
If you’re going to do this, this is what you need to know.
Loss of focus
One potential drawback is that if many markets are open at the same time, you may miss some signals.
So if you want to test in multiple markets, you need to be very focused.
With several charts moving at the same time, it’s really easy to miss a deal.
We recommend not testing more than three markets at the same time…max.
Two markets are ideal.
Your computer is slowing down
At the same time, if there is too much market, this can slow down your computer.
The trading program must update the data for each chart and calculate indicators (if used).
Depending on the computer’s powerful and backtesting software you are using, this can slow things down.
So make sure you have a decent computer and software that can handle this.
The most important specification on a computer will be the amount of RAM you have.
Processor speed contributes to overall speed, but as long as there are processors made over the last five years, you can see method More profit from RAM.
At least 16GB is recommended, but 32GB or more is ideal.
How to set up backtests in multiple markets
Now, there’s a background to backtesting the Multimarket Manual, so let’s go into how to do this in practice.
I’ve personally done this with Nakedmarkets and Forex Tester, and this works in a similar way with other programs.
You can’t do this Metallader.
If the software is unable to do this, we highly recommend switching to NakedMarkets.
This software is much more optimized for backtesting across multiple markets than forex testers.
For the rest of this tutorial, we’ll use NakedMarkets. Because that’s what I use.
Step 1: Download the historical data
Since you’ll need some data to test, the first step is to move on to: tool > Data Center Download historical data for the market you are testing.
NakedMarkets offers the latest historical data for free and no subscription required.
Step 3: Set up the backtest
Once the data is loaded, it’s time to add a chart and set it up.
Move: file > New backtest
Name your account backtest and start balance.
Next, click Next.
Select the market you want to backtest. Select multiple markets on this screen.
Please click Next.
Click using the default settings on the last screen Finish.
This opens the window for each market.
Size your windows to suit your taste.
If you need to add more windows, click on it. file > Add a new chart Select the chart you want to add.
You will be able to add the markets you selected when you created the backtest.
Note that each market can have multiple time frames.
Add a separate chart for each market, then change the time frame for the second chart.
You can also change the time frame for each chart by clicking on the chart you want to change and then clicking the time frame button in the top left corner of the screen.
Once everything on the chart is set up, it’s time to start reverse testing!
Step 4: Press Play to start trading
The difficult part is complete, but it’s time to start testing.
Press the play button in the software and all charts advance at the same speed.
Trade according to the trading plan.
Step 5: Check the results
Once you’ve completed the full round of backtests, it’s time to see how well you did.
A common mistake is to judge your trading strategy purely based on total revenue.
Most strategies do not produce good results on the first attempt, so experts look at all aspects of the strategy to identify its potential.
There are three main questions you should ask yourself when checking the results of your backtest.
- Can you improve this strategy? This is usually possible when the strategy is close to break-even. Consider risk management or exit experiments.
- Could this be traded in different time frames or in multiple markets at the same time? This will give you more transactions if you run out of transactions.
- Is the overall trend in account balances good? Strategies win consistently, but if the overall return is low, you simply need to increase the risk.
Learn more about how to optimize your strategy in this article.
Be willing to experiment with your strategy until you find something that works.
That’s the beauty of backtesting.
Before you risk your real money, you get a good idea of what works.
There are also creative elements. This makes it fun to try out new ideas that you come up with.
Conclusion
So why and how to backtest your trading strategy manually in multiple markets at the same time.
If you’re testing one market at a time, this could be a game changer.
You can find profitable trading strategies and eliminate losers faster.
A happy test!
