Backtest Any Stock Strategy In thinkorswim

I show how to backtest any stock strategy with ThinkOrSwim.
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[@FuturesChue]

Thank you! Just started paper trading a while back and will be back testing my strategy

[@Infycog]

Excellent video. Thanks

[@mikemeehan610]

Thanks Yield Collector for not overcomplicating this video. With what you have presented, if I use your video as a guide, I should be able to pull off my own backtesting in TOS!

[@tonnyguerrero2336]

this was not the video i was looking for , but i am glad i watched the whole thing ! i did not know this could be done and very exiting to try it out ! deff subscribed !!

[@meesi7053]

Thanks for the video, was exactly I was looking for.

[@ph8768]

good video, thank you!

[@jackellis3798]

Loved the video on selling monthly puts on the QQQ at 35 delta and closing on 1 day before expiration. I noticed you said you would provide a future video with further optimizing the strategy as to delta, timing (weekly, biweekly, monthly) and when to close out. Perhaps closing when index falls below strike or when 80% profit realized. Would love to see that video. Thanks for all you do on this channel.

[@Day_Tripper39]

Great video. I'm a retired programmer, so this will help me a lot and I'll be checking out some of your other videos as well.

[@MrTellyBelly]

Same here. Although being a bit lazy I get Chatgpt to give me a starter for ten and then I modify it.

[@JPWild1]

Love how you think about these strategies and show us tools to test them. Keep it up! Maybe I missed it but did you compare this to buy and hold? Guessing it beats it but nice to compare it against something we can all back test ourselves. Also, what about the possibility of wash sales? And if you do this outside of a tax deferred account you will get hit hard with short term gains. Thanks

[@yieldcollector]

If you are going to actively trade in a non-retirement account then taxes are just something you are going to have to deal with. Doing this type of thing in a retirement account is much better from that perspective. As far as comparing it to buy and hold, I don't really do that because it is not an apples to apples comparison. With a strategy like this you are only taking long trades and are doing nothing almost half the time. So your time in the market (ie money at risk) would be much less and your max drawdowns would (hopefully) be much less, also. Ideally you would scan daily using a watchlist of symbols you liked, and only take those trades when they meet your backtested criteria. Just doing a strategy like this on only one symbol would be a slow way to make money. You would need to scan multiple symbols every day for new opportunities so you are in the market most of the time.

[@Occy30]

Great video. Developing strategies is super easy in TOS but I'm wondering, can you then take a strategy and use it for automated trading in TOS?

[@yieldcollector]

Not that I'm aware of.

[@DJewell]

Thanks, I'm new to Thinkorswim Backtesting so this was a great help. QUESTION is it possible to add additional but different Studies to the Script, e.g., MACD and/or RSI, ect. . . ?

[@yieldcollector]

Yeah you can edit the script and add whatever you want.

[@DJewell]

Ok thank you, I ended up using just the SMA 5,9,200 for backtesting and played with Buy SELL parameters to get pretty good results on 6 different Stocks. Used 5Y 4H down to 6M 4H. Now I'm ready to automate this script for using on Sinkorswim. Not sure how to implement it. That's my next task. Thanks again, happy I found your channel.

[@ElCidPhysics90]

Thanks for this. You said shorting doesn’t work? Is that for all markets or primarily an uptrending market? Seems like long would work for uptrend and shorting would work for a downtrend?

[@yieldcollector]

Well the market has an overall upward bias over the long term, so going long is just the path of least resistance. I just never noticed my backtest results improving any time I added shorting into the mix. Maybe in rare years like 2022 shorting would do really well. Try some backtests and see if you can make it work.

[@JJ-rg7yp]

Do you have a way to do options backtesting on Thinkorswim? thanks

[@yieldcollector]

Sort of. I made a video about that here kzbin.info/www/bejne/l3TNonuMfpeSkLc .

[@eliefeinstein6182]

If you want to add trailing stop losses, would you just use TrailingStopLX and TrailingStopSX? Suppose you wanted to set a trailing stop loss at .5x the standard deviation for crude oil, which I believe is around 28%. Would you set trail stop to 14% and set the position effect to close?

[@yieldcollector]

The TrailingStopLX (Sell to close) with a 14% setting is the one that I would use for closing the position. I would combine that with some other signal strategy for opening the trade (like a moving avg strategy or whatever). Have that one set to "Buy to open" and disable the "Sell" option. You can have 2 strategies at the same time. One to open it and one to close it.

[@eliefeinstein6182]

⁠​⁠​⁠​⁠​⁠@@yieldcollectorGot it. Thanks! Just to be clear, I’m using a long / short strategy, not long only. So I’d use one signal (e.g., a moving average strategy) to open positions, the TrailingStopLX to sell to close long positions and the TrailingStopSX to buy to close short positions. Does that make sense to you? Thanks again

[@yieldcollector]

Yeah, that makes sense.

[@FLBeachBean]

I have watched your video several times - Thank you! For another backtesting video idea, I would love to see you create your own strategy from scratch and go through the steps it takes to backtest it on TOS. There must be some additional steps required to create the buys and sells and get the strategy to do the report?? I am failing miserably! Thanks Again for a great channel!

[@yieldcollector]

Thanks for the video idea. Maybe I'll make that. A great way to create your own strategies is to duplicate and edit an existing one that is similar to what you want. It is always harder to create it from scratch. Also, make sure your chart timeframe is long enough so you are able to see some signals if you aren't seeing any.

[@FLBeachBean]

@@yieldcollector Agree! I have been struggling to find a template in TOS that allows me to build a 7 EMA crossing the 20 SMA and backtest it.

[@yieldcollector]

Duplicate and edit the "MovAvgTwoLinesStrat". You need to add in a 2nd averageType and change it to SIMPLE. Then change the plot to point to the new variable for the slow too. After the edits it should look like this: input price = close; input fastLength = 7; input slowLength = 20; input averageType1 = AverageType.EXPONENTIAL; input averageType2 = AverageType.SIMPLE; plot FastMA = MovingAverage(averageType1, price, fastLength); plot SlowMA = MovingAverage(averageType2, price, slowLength); FastMA.SetDefaultColor(GetColor(1)); SlowMA.SetDefaultColor(GetColor(2)); AddOrder(OrderType.BUY_AUTO, FastMA crosses above SlowMA, tickColor = GetColor(1), arrowColor = GetColor(1), name = "MovAvgTwoLinesStratLE"); AddOrder(OrderType.SELL_AUTO, FastMA crosses below SlowMA, tickColor = GetColor(2), arrowColor = GetColor(2), name = "MovAvgTwoLinesStratSE");@@FLBeachBean

[@FLBeachBean]

@yieldcollector THANK YOU!! I'll give it a whirl. You are very generous with your time and guidance!! Much appreciated!!

[@patriciajohnson1813]

How do you do the buy and sell order auto using the strategy "MovAvgTwoLinesStraCustomizing"?

[@yieldcollector]

After you add the strategy, in the studies settings (the flask icon and then the gear icon), you can choose "auto" for the Buy and for the Sell. Make sure both "enabled" checkboxes are checked as well. You will find those in the "orders" section.

[@bobbyb2725]

How do I modify with profit target?

[@yieldcollector]

If you wanted to have profit targets for when to close the trades you would need to add in some code. Check out the built-in strategy called "ProfitTargetLX". You can see how that works and copy paste it into your strategy (or just duplicate that one and add your strategy into there).

[@mars20247]

Cool video. How do you account for slippage?

[@yieldcollector]

Thanks. This backtesting tool doesn't have any way of dealing slippage, sorry. Although, you might be able add it in ThinkScript if you really wanted to.

[@Dlebron28]

what about if I want to replace a moving avg with VWAP? great vid thanks

[@yieldcollector]

Thanks. There is a built-in Strategy called "VWMABreakouts". That is the closest thing to what you are looking for. There is no "VWAP" strategy included so you would need to do some scripting for that.

[@Oreoboy17]

@@yieldcollectorDo you know where i can go to have someone teach me how to script a strategy?

[@yieldcollector]

@@Oreoboy17 You can use ChatGpt for creating and learning thinkscript. I made a video showing how I did this kzbin.info/www/bejne/fondkKWfr7KHo7c .

[@Oreoboy17]

@@yieldcollector thanks for responding so fast.. i was actually working on this the past hour but was running into issues with the candles not showing when i use the study or strategy.. I’ll watch your video and see if it helps me get past that issue

[@scr82566]

Seems like buy and hold would have beaten any of these strategies. Did I miss something? What is your take away from that? Thanks

[@yieldcollector]

1. The point of the video was to show people how to backtest a stock strategy in thinkorswim. I just happened to show it on moving average crossovers. I wasn't trying to say people should start trading this strategy or not. 2. Also, in order to figure out if a strategy is better than "buy and holding" you should also consider the "time in market". These strategies are in the market half the time. I would imagine the drawdowns would be less, but I didn't calculate it. 3. Beating "buying and holding" the QQQ is very challenging over the long term. That's why I personally don't swing trade (although many people can probably do it successfully). I just made the video to show people how to test their own strategies if they want to try.

[@scr82566]

@@yieldcollector Understood. Thanks for clarifying. Great videos. Very informative.

[@ZeketheBoomer]

Do not see order options in the Studies settings. It only gives Inputs and Options and Plots

[@yieldcollector]

Did you make sure that you added a "Strategy" and not a "Study"?

[@ZeketheBoomer]

@@yieldcollector bingo

[@dudea3378]

Just wanted to say thanks. One more step towards world domination.

[@tfortexas5098]

Will this strat show on the chart in real time?

[@yieldcollector]

Yeah.