Options Trading BackTesting Software by SJ Options
Options Trading Back Testing Software by SJ Options
This is a demonstration of how our Patent-Pending Instant Backtester can help you design option spread that are safer and more profitable. By backtesting at 100X faster than traditional software can do, our tools will save you time and allow you to create solid performing trades. You can use our options trading software instant back tester to test live trades too. If they do not perform as you wish, then apply some adjustments until you are happy with the results.
This is only a small portion of what our options trading back testing software can do. To see more of the features, please feel free to contact us for a live demo using this link:
Thank you for your interest in our options mentoring and options trading software. Good luck with your option trades.
Hi there everybody! This is Morris from San Jose Options and today I have a very special demonstration for you. I’ll be talking about our instant back tester which I really what I believe to be the holy grail of options trading tools for all of you option traders out there who really enjoy to back test. We find that our patent pending tool is a hundred times faster, on average, when compared to traditional back testing tools such as those provided by think or swim, option view, and then the other tools on the market. In today’s demonstration, we’re going to show you how you can use this tool to create better trades that are more profitable once it have a very high probability and you’ll also see how to use the instant back tester to eliminate those poorly structured spread from your option portfolio.
To start off, we’re going to look at stress testing this iron condor spread. This is a typical trade that a lot of traders do but you’ll see when we use our tool, it should open your eyes to the risk involved in the trade. We also believe this is a much better way to stress test your trades than to use the black shawls formula which is built into every software. It’s really nice, we’ve really streamlined a way for you to use real data in your trade analysis. To get started with the back test, I’ll move over to the price chart. From here you could see we’re looking at the Russell we’ve constructed as iron condor spread. we want to see how it back tests over different situations so we’re aware of our profit potential as well as the risk that we’re taking on.
With our development, what we do is we just zoom up on different time frames. For example, looks like some of the bearish moves that might have happened in the past since you have performed. I selected an area on the graph and then I clicked the instant back test button. This will take my trade reconstructed for me and show me the results and I instantly get the risk up here. You can see it had a drawdown of 11% in a regular margin account or 18% in a PM account. This was a 13-day test and the price in the Russell dropped 13%. That was one test, again, it took us a few seconds. To do that in option, with think or swim, that would take it probably 5-10 minutes. I can just move on and do some other testing. Right now we’re looking at better situations. I’ll go ahead and choose another episode and then I’ll just click the instant back test button.
In here we see another loss. In this case, $475, a 6.8% or a 3.8% in a regular T-margin account. You have some other details over there. We just ran 2 tests. Again, in typical software you’d still be struggling with the first test and we’re on the test number 3. In this one we see a profit. How could that happen? Well maybe there was a volatility drop. These are the things that you don’t see when you’re just modeling your trades with the black shawls. We do have the black shawls also, by the way, but it’s so much better to use real data. This one, it survived. We only had a 3% drop in a couple of weeks there. But again, let’s try the stress test, a little bit steeper bearish move in the market. There is a little bit of a drawdown. Here’s another move. It would be interesting to see 14% of drawdown on this one.
Now, there’s another thing that might come to mind, in this particular test, what we’re doing is we’re building a trade and we’re seeing how it performs without adjusting. Some of you may think, “Well, that’s silly. When I put on a trade I’m always going to adjust it.” If you think about it, the reason that you’re adjusting your trades all the time is because the way that you’re constructing them, they’re not safe. And then they go through these moves like we’re looking at here. Just one week down 7%, this happens quite often and you’re down 14% already on the trade. This is why you’re adjusting so much. If you think about it, with this tool, you can go through this system, like we’re doing now, you go through and you back test your bearish moves, bullish moves, your neutral moves, things like that. You try to construct the trade that’ll allow you to go through all of these different stress tests and perform in an acceptable way without even adjusting. Once you have a trade that’s designed like that, then you have a trade that’s far superior and it’s going to outperform these types of trades. Because what we’re looking at here is a trade where, again, you’re going to be forced to adjust and all of these adjustments that you’re doing, you’re locking in your losses.
Let’s do a couple more here. I didn’t get an exact match on that one. Look at this, like a 90% loss on the condor. Again, these types of moves, you know, they should be eye openers for you. You can’t even leave on this typical condor for 2 weeks without just ruining your account. I don’t want to take up all of your time. Let’s look at some of the bullish moves now. Here, we’ll select a time and see how the condor performs when the market moves up; again, 50% loss. Imagine putting, you know, managing your account on one or two condors and putting all your money into those. Boom! In ten day, you’ll lose half of your account. These tools, they can really open up your eyes to what’s going on with the performance of your portfolio. Another 10 days, 5% move, 58% drawdown on this other condor.
I think we could clearly see that the problem with the condor is that when the market goes up or down, it loses much more than it could ever make. We can certainly test some of the sideways moves and this is where it performs better, obviously, but there’s two directions with this trade where it just doesn’t perform very well. And look when it goes just right, it doesn’t even make a lot. Look at another segment here, somewhat sideways. Finally, got a decent return. So now, what I’m going to do is I’m going to bring in a different type of trade and we’ll do some stress testing together and I’ll show you the difference and, again, show you how you can use this instant back testing technology to improve your trades, to design a better architecture that will perform for you.
Let’s continue this conversation. Now, I’ve made some modifications to the condor and we’re going to do some more testing and we’ll do some random testing. Again, we’ll do some bearish moves, neutral, bullish and then we’ll see if we made some improvements on the condor. First we have, you can see this bearish move here. And then we’re looking at the T-margin 2.7 but PM 25%, pretty nice return there. You can just click anywhere in the graph and you’ll get a random location to test. Again, about 5%-28, another really nice return. This might not find the match ‘cause the way the graph ends but we’ll check so that we may move to a different segment. It was missing some days.
This one’s a bearish move and you’ll still see a pretty nice return. This one’s another bearish, almost sideways. And these are 2 week intervals. This one we hit, what looks like, well, again T-margin 11% drawdown. This is what’s nice about doing your back testing this way because if you use the black shawls, it doesn’t account for reality, whatsoever. You’re not going to get any of these losses sometimes with the black shawls. With our software, it allows you to test as many as you like. You could see how fast it is. If you get an odd return, then, obviously make a note of it but this way, you can do hundreds of tests really fast where, again, with traditional software, it’s so much work. Like every one of these with the traditional software, you have to rebuild the trade every single time. You can’t possibly get this kind of information. With us, all we have to do is change the dates on the calendar and then we construct the trade for you. When it’s missing the days, that’s why I didn’t find anything. It has to have a beginning and end day.
You can see that the modification we made to the condor, now, most of the trades are actually winners. We saw one sort of out of line that had a loss but we haven’t seen that happen again. It could’ve been possibly the data wasn’t so great or maybe sometimes the prices, they expire and the final prices could be outside the bidding that asked and that could be what happens when you see some returns are out of line. But notice how many tests we can do and how fast, again, it makes your results so much better. I fusing traditional software, you don’t have the time to create this many tests to get very accurate data. With our instant back testing tool, it really does help you to create yourself an income strategy that’s very solid, that you can thoroughly test, ‘cause you could test it so fast, and you could put it through different episodes again. Like, if I want to really try to stress test to make sure I can handle like a 4-day pretty solid drop. I can go through those and test them really fast.
We had T-margin about a 1% drop there. You want to make sure that what you have designed is not going to throw you some curve ball and just surprise you with more risk than you’re aware of. This tool helps tremendously before you put your real money into your trades. Again, we have a 6% move in 9 days and the strategy made the profit there with a loss. Could it handle a sideways move? You could turn it like a couple of weeks and it makes money there too. Adjustments that I made are outperforming the condor even in the sideways markets.
There you have it. That’s about all I wanted to share with you today and hopefully you can understand how special this type of tool is. We do provide it to the students right now. You get it for 6 months free and, you know, these type of tools they’re so special, they save you so much time, they allow you to create yourself safer trades. Also, I was thinking about, in the course, we actually provide the trade models for you and then you can build from those but it’s taken us years to be able to develop such solid foundations and the architecture of our trades, as you could see, is so much safer than what’s typically being presented by others and traded traditionally in the market.
Before we wrap this up, I’ll just summarize what I was hoping to express to you in this presentation. Number one is back testing is a very important part to option trading. The current tools that are available on the market are very time consuming to use. We worked hard to develop a faster, more efficient, more effective way to stress test our trades and to instantly back test them. What this allows the user to do is, I showed you today, to create trades that can withstand bearish moves, bullish moves, and neutral moves and allow you to collect a monthly income without adjusting every 3 or 4 days. You can use this tool to design really solid structures that you can’t possibly do with the software that’s out there because it takes you so long. You see how it works, you construct a trade one time and then from there you just choose your time on the price chart where you want to stress test in it. The software creates the trades for you. It rebuilds the trade as close as it possibly can to the original trade and it does all the work for you, couldn’t make it any easier. It’s just a wonderful tool that can really change your trading. It’ll open your eyes to these trades that you have on. you can use it on your live trades. If you have some trades that are already placed with your broker, you can run them through this test and see what your risk exposure is and see if they have that much profit potential. If they don’t, then again, you can use a tool. You make some adjustments to your trade and you run it through all of these tests until you’re happy with it. That’s really how this tool is used. You can spend a couple of weeks using this and with the strategies that we give you and you can even build on them. Within just a few weeks, you should be able to have some strategies that greatly improve your monthly returns that will be safer in all the situations that you stress test and ultimately make you a much better option trader because your trades will be so much more solid than the trades that you’re using now.
Thank you very much for watching this demonstration. This was Morris from San Jose Options. Wish you the best of luck in your trading. For more information, visit us at sjoptions.com or sanjoseoptions.com. Thank you very much!