Charts – Backtest Trailing Stop
beeTrader allows you to backtest a Signal (Trading System) also by applying the trailing stop to it. Considering that you cannot know the way in which the historical data bars on which the backtest is formed, three different calculation methods are available for the use of the trailing stop.
For example, suppose the Trailing Stop was generated in a price bar with High = 11.00 and Low = 9.00, the Trailing Stop activated on Last = 10.00.
- High / Low Prices: it is the simplest calculation for the Trailing Stop, in our example it carries out the calculations with the High value, therefore 11.00;
- Normal Distribution: for the calculation of the Trailing Stop a probabilistic calculation is applied based on the Normal Distribution , every time the button is clicked the calculations are performed using a random exit value from the Trailing Stop whose probability curve will tend to favor intermediate values, therefore around 10.50 in our example;
- Uniform Distribution: for the calculation of the Trailing Stop a probabilistic calculation is applied based on the Uniform Distribution , each time the button is clicked the calculations are performed using a random exit value, between the values 10.00 and 11.00 in our example.