Backtesting
The Enhanced System Tester allows traders to create, back-test, compare, and optimize trading strategies before risking money in the markets. System tests are written using an extended version of the MetaStock Formulas Language. Backtesting answers the question, “How much would I make or lose if I traded this security or these securities using these buy and sell rules?” Traders can change and edit conditions such as entry, exit, stops, order sizes, and commissions to make the simulation more realistic. The buy and sell conditions can be optimized in order to show the best performing parameters. For example, by optimizing, a trader can learn which moving average performed the best for IBM over the last five years.
Read more about this topic: Meta Stock