Use the trading strategy parameters sizing tab to set up size of trades and other trading parameters used to evaluate the trading strategy.

The size of trades is important because it is the basis for profit and commission calculations during the backtest. For the profit and commission statistics to be realistic, you should specify a trading size that is closest to your actual trading style.

The parameters on this tab may or may not be visible depending upon the currently selected Trading Strategy Wizard Interface Options. Press the Options button to change the Trading Strategy Wizard Interface Options. For more information see Trading Strategy Wizard Interface Options.

1. Specify the Position Sizing used to evaluate the trading strategy. For detailed information about each position sizing method, see Position Sizing Methods.

• Set an Initial Account Balance that matches the dollar amount of initial equity you would normally deposit in your brokerage account to trade each individual symbol.

As trades occur, the profit and loss of each trade will be added to the Initial Account Balance to create a running Account Balance/Equity value. The running Account Balance is used by many position sizing methods to dynamically calculate the size of each new trade.

However, even position sizing methods like Fixed Size, which do not use Account Balance as part of its size calculation, will still reduce the size of trades if there is not enough account equity to cover the desired trade size based upon the current price level, commissions and margin setting. If the Account Balance ever drops below the amount of equity required to buy a single share/contract/lot, then the Trading Strategy will no longer make actual trades and will show trades of zero size.

• To select a position sizing method click in the box to the left of the position sizing method.

• To modify the parameter value of a selected position sizing method, click on the parameter name and then press the Modify Position Sizing Parameter button.

• (Power User only) To select more than one position sizing method click in the box to the left of each desired position sizing method.

If only one position sizing method is selected, it will display a black lock icon in the box to the left of the method name, which indicates that NeuroShell will only calculate results using that position sizing method.

(Power User only) If multiple position sizing methods are selected, they will display a red circular arrow icon in the box to the left of the method name, which indicates that NeuroShell Trader will determine which of the selected methods gives the best results during optimization.

• (Power User only) To turn optimization of the parameter(s) of a selected position sizing method on or off, click in the box to the left of each parameter name.

A black lock icon in the box to the left of a parameter, is an indication that NeuroShell will only calculate results using the listed parameter value.

A red circular arrow icon in the box to the left of a parameter name, is an indication that NeuroShell Trader will determine a parameter value within the listed parameter range that gives the best results during optimization.

• (Power User only) To modify the parameter range of a selected position sizing method, click on the parameter name and then press the Modify Position Sizing Range … button.

2. Specify the Other Trading Parameters used to evaluate the trading strategy.

Buy shares in round lot of ‘ Rounds down the number of shares traded to a multiple of the specified number of shares. As an example, if the round lot shares is set to 100 and the number of shares to be traded is 299, then the actual number of shares traded will be 200.

Long/Short entries exit existing short/long positions ‘ Forces an entry signal to automatically exit existing positions. Long positions will be exited when the short entry condition(s) become true. Likewise, short positions will be exited when the long entry condition(s) become true. If you do not select this parameter and you have specified trailing stops and/or exit conditions, then a position will be exited only when the trailing stops are hit or the exit conditions become true.

Send order to brokerage in $ amount instead of # shares/contracts/units – To aid in the trading of Forex models and other instruments that might trade in dollars instead of shares/contracts/units, this option allows for sending orders to the brokerage during integrated trading in dollar amounts instead of in shares/contracts/units.

Note that if your trading instrument is not quoted in dollars, then selecting this option will send trades to the brokerage in the quoted currency unless you specify an exchange rate on the costs tab. So for instance if you select this option when trading EUR/JPY without an exchange rate specified, your trades will be sent to your brokerage as the amount of Japanese Yen you wish to trade. However if you select this option and specify a Yen to Dollar exchange rate, then your EUR/JPY trades will be sent to your broker as the amount of U.S. Dollars you wish to trade.

IMPORTANT: Please note that when trading in Dollars (or any other currency amount) instead of a fixed number of shares/contracts/lots, it is extremely likely that trades that NeuroShell places to close out positions may not entirely close out a position and you will have to do manual position cleanup with your Broker’s web interface. The reason for this is because even though NeuroShell Trader signaled a close out trade of something like $100,000 based upon the most current prices, by the time the trade reaches your brokerage, the price and/or exchange rate may have changed every so slightly such that a close out trade would actually require a trade of $99,999 or $100,001, thus still leaving $1 worth of manual position cleanup on your part.

NOTE: It is the user’s responsibility to determine if their brokerage takes Forex Trades in $ or in units and set the Send order to brokerage in $ amount instead of # shares/contracts/units option appropriately.

NeuroShell sends an order size to the brokerage as a simple numeric value without any notation as to whether that number values represents a $ or unit amount. So if the Send order to brokerage in $ amount instead of # shares/contracts/units setting does not correspond to how your brokerage accepts FX orders, then the actual amount placed by NST will not match the size your brokerage places.

When you are satisfied with the Trading Strategy Parameters press the OK button to return to the Trading Strategy Wizard.

 
Topic of Interest:
What are Trading Strategies?