7 Best Stock Backtesting Software For Trading Strategies 2021

There is only a handful of high-quality trading strategy & stock backtesting platforms on the market today.  We share 7 of the best broker agnostic and broker dependent backtesting strategy platforms.

All 7 of the platforms are impressive; your choice depends on what you are looking for and your level of experience:

Summary: Stock Backtesting Software Platforms

Our testing process chose Trade Ideas as the best fully Automated AI Trading System, as it does all the backtesting for you. MetaStock is the most powerful stock backtesting & forecasting platform for broker agnostic traders. TradingView offers an intelligent, robust backtesting solution for free. Interactive Brokers has solid fundamental backtesting & portfolio management. Finally, TrendSpider provides innovative AI-driven automated backtesting and chart analysis.

  1. Trade Ideas: Best AI Automated Backtesting & Market-Beating Trade Signals
  2. MetaStock: Best For Powerful Backtesting + Forecasting, Win/Loss Reporting & Strategies Marketplace
  3. Tradingview: Best Shared Social Strategies & Effective Pine Code For Backtesting
  4. TrendSpider: Innovative Cutting Edge AI System Backtesting & Multi-timeframe Analysis
  5. Interactive Brokers: Best For Fundamental Backtesting of Portfolio Strategy
  6. Tradestation: Great Chart Backtesting For Tradestation Brokerage Clients
  7. Quantshare: Low Price, Broker Agnostic Backtesting, But Challenging to Use

Click the vendor name above to jump to the review section.

1. Trade Ideas: Best AI Automated Backtesting & Market-Beating Trade Signals

Recommended for Day Traders wanting specific Artificial Intelligence driven trading signals; Trade Ideas is a revelation. The Trade Ideas Holly AI Trade Signal engine has a proven track record of beating the market.

Can you imagine a world where you did not need to backtest your stock trading theories for hundreds of hours, to get an edge in the market? Well, no need to imagine; it’s already here, with Holly AI.

Trade Ideas – Review Winner – Best AI Trading Software & Backtesting

Price: $118 – $228/m
Rating:
Special Deal: Use Code “Liberated” for a 15% Discount

Pros

3 A.I. Trading Algorithms That Beat the Market
Fully Automated Backtesting
Exceptional Stock Scanning
Specific Audited Trade Signals
Auto-trading With AI Signals

Cons

User Interface

Try Trade Ideas Free Now

At first, access to the Holly AI system might seem a little pricey. You will need to go for Trade Ideas Premium, which costs $228 per month, or you can save $468 by going for an annual subscription costing $2268. For this investment, you get access to the robust backtesting and the Holly Artificial Intelligence System. Features include:

  • A.I. Virtual Trading Analyst Holly – 4 different constantly evolving A.I. algorithms
  • Chart Based A.I. Trade Assistance & Entry and Exit Signals
  • Risk Assessment – Detailed information on the backtested performance of the recommended trade.
  • Build and Backtest any Trade Idea – Extremely powerful point & click backtesting system.
  • Autotrade w/ Brokerage Plus and A.I. – Advanced auto trading using Interactive Brokers.

Trade Ideas Backtesting

The Trade Ideas platform has a potent backtesting system, which is not only easy to use, but you do not need to have any programming knowledge.  A point and click backtesting system is rare in this industry; the only good software with this capability is TrendSpider.

I have run many backtests with Trade Ideas, but the one I wanted to focus on was a backtest of the “Unusual Social Mentions Scan.”  This is a good test of the wisdom of crowds.

Trade Ideas – OddsMaker Backtesting The Social Mentions Strategy

I wanted to focus on was a backtest of the “Unusual Social Mentions Scan”.  This is a good test of the wisdom of crowds.

As you can see in the backtest result above, it seems the crowds are not very wise as the backtest shows that the system loses 70% per year. This helps me draw three conclusions.

  1. Do not listen to people on social media.
  2. Trade Ideas provides an excellent and unique insight into stock market crowd sentiment.
  3. If you do the opposite of what people suggest on StockTwits, you may have a winning system.

Overall I rate the backtesting system a 5/5 Stars.

Trade Ideas Pro AI

The AI algorithms developed by Trade Ideas are the main reason you would want to sign up. I had a lengthy zoom session with Sean Mclaughlin, Senior Strategist over at Trade Ideas, to delve into how the AI works, and I was very impressed. This company is laser-focused on providing traders with the very best data supported trading opportunities. There are currently four AI systems in operation.

Holly is 4 AI Systems Applying Over 70 Strategies Differently.

Holly AI

Holly AI is the original incarnation of the algorithms. Holly applies 70 different strategies to all the stocks on the US & Canadian stock exchanges, including pink sheets & the counter (OTC) markets. 70 strategies multiplied by 10,000+ stocks means millions of backtests every day.  Only the strategies with the highest backtested win rate over 60% and an estimated risk-reward ratio of 2:1 will be suggested as potential trade the following day.

Trade Ideas – Holly Grail’s Trade History / Strategy & Exits.

Holly 2.0

Holly 2.0 is a more aggressive version of Holly AI, presenting more aggressive day trading scenarios for you to choose from. Trade Ideas operates 3 key trading styles with each AI engine, Conservative, Moderate & Aggressive.  Holly 2.0 is aggressive.

Holly Neo

Holly NEO is a newer AI, which seeks to trade real-time chart patterns. It utilizes a mix of the following strategies.

  • Pullback Long – Seeks to identify trades where the stock price is down and is seeking to start moving up on higher volume.
  • Breakout Long – Where stock price breaks out up through a key resistance or to new highs.
  • Pullback Short – identifying a short pullback opportunity in price.
  • Breakdown Short – a shorting opportunity where upward momentum breaks down.

Omni AI

Omni AI is also a real-time AI ideas engine, but it combines all of the above strategies into a straight short or long trade recommendation. It is a new development and does not yet have a proven track record, but on viewing the recent trades, the performance looks good.

Trade Ideas Buy & Sell Signals

One thing I really like about TI is that it visually shows you every signal buy and sell signal on a chart. In the chart below, I have highlighted a trade recommended by Holly AI (Holly Grail). This trade for Cleveland Biolabs (Ticker: CBLI) made a 25% profit within a 4 hour period. Not how the buy and sell signals are depicted on the chart.

Trade Ideas – Trades & Buy & Sell Signals

The Facts About Trade Ideas Signals

  • Trade Ideas has large institutional clients, such as Schwab, and is a legitimate business.
  • Trade Ideas recommends, on average, about 3 to 10 trades per day.
  • Each trade last duration is from a few minutes to a few hours.
  • Upon downloading and analyzing 65 days of trades, I can confirm the performance numbers claimed by trade ideas.
  • You need to be an active day trader to take advantage of Trade Ideas.
  • Trade Ideas returns approximately 20% per year.
  • Trade Ideas has, in the last 2 years, has beaten the S&P500.
  • You need to be able to short and go long to take advantage of the trading strategies.
  • Depending upon your leverage, trading style, and which trades you take, you could make more than 20% or even make a loss.
  • TI is Day Trading Software; you will need to hold a minimum balance of $25K in your brokerage account to actively pattern day trade in the USA.

Trade Ideas AI Backtesting Performance

The claimed Trade Ideas performance is available on their website, and it is quite impressive. But to judge the performance of any system, we have to compare it to the performance of the underlying benchmark. In this case, I compare $50,000 invested in the S&P 500 versus day trading with Trade Ideas.

AI Performance Starting Capital Jan 2019 Ending Capital Oct 2020 Return % Per Year
Holly Grail (AI)  $50,000.00  $71,186.00 42% 23%
Holly 2.0  $50,000.00  $80,510.00 61% 33%
Holly Neo  $50,000.00  $71,186.00 42% 23%
S&P 500  $50,000.00  $66,000.00 32% 17%

 

As you can see, Holly has out-performed the S&P 500 since 2019.  Interestingly Holly did not suffer the huge losses incurred in the S&P 500 during the Corona Crash from March to April 2020.

2. MetaStock: Powerful Stock Backtesting & Forecasting Strategies

MetaStock is simply one of the best, if not the best independent, broker agnostic, scanning, backtesting, and forecasting software platforms available.

 

MetaStock Rating: 
Special Deal: 3 Months for the Price of 1

MetaStock – Review Winner, Best Backtestign & Forecasting System & Marketplace

Pros

Develop Sophisticated Systems & Backtest Entire Markets In 1 Click
Great Backtesting Profit, Draw-down & ROI Reporting
Exceptional & Intuitive Forecasting Software
Number 1 For Charts, Indicators & Real-Time News
Excellent Customer Support & Educational Seminars
All Global Markets Covered + Broker Independent

Cons

Need Some Scripting Skills Although MetaStock Support Can Assist
No Automated Trade Execution

Visit MetaStock

MetaStock’s Backtesting Software

As you launch MetaStock, you are presented with the Power Console, which enables you to select what you want to do quickly.  Select System Test, and you will have access to 58 different systems you can backtest.  In the example below, I selected the Equis MACD Expert System, and I ran in on the entire Nasdaq 100.

After 60 seconds, the backtest was completed and presented me with a list of every buy or sell trade and, of course, the drawdown on the portfolio chart that you can see above.  You can click through to any trade to see the background to the trade, size of the trade, duration, and profit or loss.

MetaStock harnesses a huge amount of inbuilt systems and Expert Advisors that will help you as a beginner or intermediate trader understand and profit from technical analysis patterns and well-researched systems.  This is a crucial area of advantage.

Of course, the inbuilt systems are not going to make you super-rich; the reason you want to backtest and develop your own winning system is to get an edge in the market.  With some scripting or programming skills, you will be able to achieve this with MetaStock.  If you do not, you can ask MetaStock or one of a considerable number of MetaStock Partners to assist you in building your system.

MetaStock System Tester Backtesting Platform

There are also many premium stock trading systems for MetaStock sold by their partners and usually backed up with training and webinars to support the clients.

Fundamental Scanning and Screening

As  I mentioned, MetaStock is owned by Thomson Reuters, who are, without a doubt, the biggest and best provider of real-time news and market analysis.  They also have an incredible database of global financial data, not just on companies but countries, economies, and industries.

The filtering and scanning possibilities are endless. I would like to see better integration within the MetaStock suite, bringing together the fundamentals and the technical analysis to enable better charting and technical analysis on fundamentals. However, the wealth of data is first class.  Using MetaStock Refinitiv Xenith, you can see an incredibly in-depth analysis of company fundamentals from debt structure to top 10 investors, including level II market liquidity.  With excellent watchlists featuring fundamentals and robust scanning of the markets, MetaStock gets a perfect 10.

MetaStock Forecaster Capability

The most significant addition to the MetaStock arsenal is the forecasting functionality, which sets it apart from the crowd.  By selecting Forecaster from the power console, you can simply choose one or more stocks, ETF’s or Forex pairs and click forecast.

The Wonderful MetaStock Forecasting Tool

You are then presented with an interactive report which enables you to scan through the many predictive recognizers which help you understand the basis for the prediction and the methodology.  Clever stuff.  But don’t listen to me; my partner Hunter Smith over at MetaStock has made a great video on the Forecaster technology.

Predict Market Prices With MetaStock Forecaster Video

Try MetaStock With a 3 Months for 1 Month Deal

You can even use artificial intelligence “like” functionality to test a set of variables within your backtesting.  You could, for example, test if price moves above the moving average 10,11,12,14,16,18 or 20 in a single test to see which of the moving averages best work with that stock.

MetaStock is one of the few vendors that take forecasting exceptionally seriously.  The system backtesting is excellent because it allows you to test if a theory, idea, or set of analysis has worked in the past.  Forecasting takes it to a whole new level by playing forward the backtesting to see how successful you might be with a strategy under certain circumstances.  The configurable nature of the reporting for the results of both backtesting and forecasting are excellent.

Technical Analysis & Forex Forecasting

Forex forecasting based on sentiment is an exceptional feature.  Never mind the broadest selection of technical analysis indicators on the market today. MetaStock is the king of technical analysis, warranting a perfect 10.

MetaStock takes a clean sweep when it comes to Charting covering all the core chart types, but also includes Point & Figure, Equivolume, and Market Profile charts.  When it comes to indicators, MetaStock has 300+ different types, including Darvas Box and Ichimoku Cloud.  MetaStock will also help you develop your indicators based on their coding system.

Finally, MetaStock racks up a perfect score on the drawing tools section, which includes Gann and Fibonacci tools.

MetaStock Pricing

To understand the pricing, you need to know that you can purchase MetaStock with Datalink, the data provider, or you can purchase a real-time subscription or even my preferred choice, which is MetaStock + Refinitiv Xenith.  Why do you need Refinitiv Xenith? Because it is the premium stock market and financial markets research tool and includes a real-time news platform powered by Thomson Reuters?

MetaStock with Datalink: $69 per month. Good For Backtesting & Forecasting On End Of Day Data

MetaStock by itself starts at a very reasonable $69 per month, which unlocks the entire package. As you will see, that is an excellent combination of award-winning technical analysis and expert advisors for system backtesting, forecasting, and analysis.  It is designed only for the PC but can run on Mac with PC emulation software.  You will need to download and install MetaStock and configure your specific data feeds for the markets you want to trade. 

MetaStock has a clean sweep in terms of Stock Exchanges covered (e.g., All of them), and it includes ALL of the vehicles, Stocks, ETF’s Mutual Funds, Options, Futures Forex, and Bonds. MetaStock is one of the biggest fish in the sea of stock market analysis software.  Backed up by the mighty Thomson Reuters, you can expect excellent fast global data coverage and broad market coverage.  There are two other packages below, and having reviewed the Refinitiv Xenith application, I would recommend the MetaStock + Refinitiv Xenith option, as it ensures you have the real-time news package with MetaStock. However, you can still backtest well and save money with the MetaStock R/T service.

MetaStock R/T: $99 per month. Perfect For Intraday BackTesting With Reuters Real-Time Data.

This package is a fully-functional version of MetaStock R/T (real-time) charting and analysis software that is designed for real-time market analysis.  Refinitiv XENITH powers it, so you should get  real-time news, data, and analysis.

MetaStock R/T Subscription with Refinitiv XENITH: $199 per month. The Complete Package

This service is also a fully-functional version of MetaStock R/T charting and analysis software that is designed for real-time market analysis and is powered by Refinitiv XENITH; the key difference is it provides streaming data at any time frame, including tick, intraday, daily, weekly, etc.

MetaStock with it’s Thomson Reuters Refinitiv Xenith News service integration is worth the money just for the news service, but it is so much more than just news.  See in the News section below what Refinitiv Xenith can do.

We work with MetaStock as a partner and have a special 3 months for the price of 1 offer for our readers.

MetaStock Backtesting & Forecasting Summary

All in all, a top-class showing from MetaStock, simply put, one of the best packages available.  My personal recommendation for an investor or trader is to combine the MetaStock & Refinitiv Xenith Packages together.  The depth of fundamental research and news in Refinitiv Xenith is staggering, and the in-depth analysis, backtesting, and forecasting in MetaStock is industry-leading.

If $199 for the Refinitiv Xenith + MetaStock Package is too much, then fear not. If you simply want the end of day data and all the MetaStock functionality for backtesting & forecasting, the price starts at $62 per month.  You can get even by one-off licenses if you prefer.

3. Tradingview: Best Free Backtesting Software & Trading Community

There is no doubt about it; I love TradingView and use it every single day.  I post charts, ideas, and analysis regularly and chat with other traders. Follow me on TradingView.  The entire community on TradingView is focused on trading and investing, and the service is first class.

Price: Free
Rating:
Trade Stocks:  USA, UK, Australia, Europe, Asia

Pros

Social First, Chat, Publish, Follow
Easy System Development With Pine Script
Strategy Tester Manual Backtesting
Global Exchange Data
Backtesting for Cryptocurrency, Forex & Stocks USA & Globally

Cons

No Real-time News
Backtest Only Single Instruments Not Entire Markets

Launch TradingView Now

Backtesting with TradingView Strategy Tester.

TradingView has an active community of people developing and sharing stock analysis systems, and you can create and sell your own with the Premium-level service.  Also, there are a vast number of indicators and systems from the community for free.

They have implemented backtesting in a straightforward and intuitive way.  In the image below, I have implemented an in-built strategy called “Slow Stochastics,” which initiates a trade when the stochastics indicators are oversold and sell when stochastics is overbought.

What I like is the fact that in a few clicks [Strategy Tester -> Add Strategy], you have results.  You can also tweak the parameters of the strategy, as you can see above, and observe the results.

Backtesting Strategies With TradingView

The backtesting results reporting is good; the tabs show you the profit performance of the strategy, including:

  • Net Profit
  • Drawdown
  • Buy & Hold Return
  • % Profitable Trades
  • Number of Trades
  • Charts on trade performance, and much more.

I have even implemented my Stock Market Crash Detector strategy into TradingView; I am no developer, but the Pine Script language is so natural, anyone can do it.

Market Replay

TradingView also has a market replay functionality which enables you to play through the timeline and shows you the chart scrolling and the trades executed; it is so simple and yet powerful to use.  All buy and sell orders are drawn on the chart and highlighted.  All in all, this is a great package that is actually included in the free version.

The only things you cannot do is forecast and implement Robotic Trading Automation, but that is typically what broker integrated backtesting tools perform.

Pricing & Software

You can have TradingView for free; it is a review winner for our Best Free Charting Software Review.  However, there are limitations.  I would recommend going for the PRO+ at $19 per month or the Premium at $39 per month; the benefits are extensive, including priority customer support and unlimited everything.  Also, a huge benefit is that the data speed and coverage are mind-blowing, covering literally every stock market on the planet and not just stocks but ETF’s, mutual funds, futures, forex, bonds & cryptocurrencies AT NO EXTRA COST.

TradingView Platform Analysis

Trade Management. With TradingView, you get full broker integration, you can place trades on charts, and it will take care of profit & loss reporting and analysis for you.  The only thing it does not cover is Stock Options trading.  There are a few complications trading stocks in the USA directly from charts; you will need to see if your brokers have a CQG integration.

Fundamental Scanning & Screening. A perfect 10 for TradingView as they hit the mark on real-time scanning and filtering, and fundamental watchlists also.  The list of fundamentals you can scan & filter on is genuinely huge.  Any idea you have based on fundamentals will be covered.

Moving Averages Ribbon Beautifully Implemented In TradingView

News & Social Community. As soon as you connect to TradingView, you realize this is also developed for the community.  You can look at community ideas, post your charts and ideas, and join limitless numbers of groups covering everything from Bonds to Cryptocurrencies.  You can connect with other traders, read their ideas, be inspired, and there is a full chat function integrated.  It is simply the best socially integrated trading platform on the planet.  The news feeds are fully integrated, including Kiplinger, DailyFX, Futures Magazine, FXStreet, and StockTwits.  Add that to the social network, and you have a great solution.

Connect on TradingViewConnect & Follow Me On TradingView For My Latest Trading Ideas & Chart Analysis

Technical Analysis & Charts.  With over 160 different indicators, and unique specialty charts such as LineBreak, Kagi, Heikin Ashi, Point & Figure, and Renko, you have everything you will need as an advanced trader.  With the Premium membership, you also get Level II insight, fully integrated.

TradingView’s Insanely Beautiful Charts, with a massive selection of indicators. This Chart Feature Moon phase and Darvas Boxes

Did I mention the charts are fast and beautiful?

Ease of Use.  Within 5 minutes, I was using TradingView, no credit card, no installation, no configuring data feeds; it was literally just there.

TradingView Backtesting Summary

A great way to kick off your life as a system developer.  A vast selection of free and premium strategies to test and the biggest and most active community of traders on the planet.  TradingView has it all.  I would recommend at least going for the Pro or Pro Plus subscription as they enable more charts, indicators, and views, including intraday market data, which you might need for your backtesting.

Read the Full TradingView Review Open An Account With TradingView

 

4. TrendSpider: Cutting Edge Automated AI Strategy Backtesting

TrendSpider has fully automated AI-driven trend-lines, Fibonacci & Multi-timeframe analysis on stocks, Forex, Crypto & Futures.  Add to that a robust backtesting engine, and you have a great technical analysis platform.

Price: $27 per month (real-time)
Rating:

Pros

Automated Trend Line Detection
Automatic Multi-TimeFrame Analysis
Simple & Powerful Backtesting
Real-time Exchange Data Included in Price
Automatic Fibonacci Trend Detection
Stocks, ETFs, Forex, Crypto, Indices & Futures

Cons

No Auto Trading
No Social

TrendSpider Free 7 Day Trial

The TrendSpider team are innovating at breakneck speed, and the features they are innovating are unique to the industry.

TrendSpider – Automating Stock Chart Analysis

The TrendSpider Innovative Approach To Backtesting

TrendSpider takes a different approach to backtesting.  Because the platform is built from the ground up to be able to automatically detect trendlines and Fibonacci patterns, it already has an element of backtesting built into the heart of the code.

The highest probability trendlines are automatically flagged, and you can adjust the sensitivity of the algorithm that controls the detection, so show more or fewer lines.

Adding to this, they have implemented a strategy tester that allows you to freely type what you want to test, and it will do the coding for you.  It is a slick and simple implementation that had me up and running in minutes.  One of the elements I really like is the ability to adjust your backtest conditions on the fly, and the “Price Behaviour Explorer” and “System Performance Chart” automatically update.   You can jump into coding if you want to, but the key here is that you do not HAVE to.

Integrated backtesting of automated trendlines, showing win-rate, profitability, and drawdown is a new addition and warmly welcome; the team is finally propelling TrendSpider into one of the leading technical analysis packages in the industry.

TrendSpider BackTesting Entry & Exit Point Chart

TrendSpider has an excellent price point starting at $27 per month, which includes real-time data.  They have also expanded to cover Forex, Crypto, ETFs, and Futures, which means you can apply the stunning Auto Trend-lines and Multi Time-Frame Analysis on many different markets.  The platform is built on HTML 5 and needs Zero installation and Zero data feed configuration.

The system runs on all platforms, from smartphones to PCs.  Finally, I have tested the customer support and confirm it is excellent, and you have a human to chat with whenever you like.

Packed full of innovative technical analysis tools means that TrendSpider is catapulted to the top of this list.  If you are a serious market analyst, then TrendSpider will help you do the job quicker, with better quality, and help you to not miss an opportunity.

Automated trendline detection and plotting do a better job than a human can; using algorithms, the system can detect thousands of trends-lines and flag the most important ones with the highest backtested probability of success.

The multi-timeframe analysis means you are able to view multiple timeframe charts on a single chart with the trendlines plotted automatically.  Another great feature is the advanced plotting of support and resistance lines into a subtlely integrated chart heatmap.

Finally, Raindrop Charts are a completely unique and intuitive way to visualize volume profile or volume at price action.

 

5. Interactive Brokers: Best For Fundamental Backtesting of Portfolio Strategy

Ideal for Active Investors and Day Traders seeking the LOWEST Trading Costs, Direct Global Market Access & Quality Tools

Price: $0 For Clients
Rating:
Trade Stocks: Globally

Pros

The Best Fundamental Backtesting In The Industry
Great Trading Platform
Direct Market Access
All Markets & Vehicles

Cons

You Must Be An IB Client
Limited Backtesting On Chart Indicators & Supply / Demand

Visit Interactive Brokers

Interactive Brokers provides direct market access for fast execution and best in class margin costs.  They are the grandfather of online discount brokers.  Not only are they a long-established company, but they are also large.

It has a complete set of services, enabling you to trade practically anything on any market, Stocks, Options, ETF’s, Mutual Funds, Bonds, Foreign Exchange, and even Futures and Commodities. Usually, when a company is well established, it loses its competitive edge.  Not so with Interactive Brokers

Interactive Brokers Trading Platform

Interactive Brokers has a genuinely outstanding trading platform based on Trader Workstation (TWS).  It is free to download and use as a client, and it is the single place to be able to trade any and every one of the vehicles on offer from IB.  It caters to everything Stocks, Options, Futures, Forex, Bonds, Mutual Funds & ETF’s.

Interactive Brokers Trader Workstation TWS

Not only that, but there are also a considerable number of add-on advanced tools that plug into TWS, such as:

  • ChartTrader – for trading directly from charts.
  • Continuous Futures – for commodity futures scanning and analysis.
  • DepthTrader – for in-depth analysis of market liquidity.
  • OptionTrader – deeper Options Analysis with specific Options strategies.
  • ProbabilityLab – to test the Probability Distribution of a particular trade
  • Portfolio Manager – for backtesting.

In total, there are 27 different advanced trading tools to suit every possible approach to the market.

Backtesting With Interactive Brokers’ Portfolio Manager

The “Portfolio Manager” tool within the powerful Trader Workstation (TWS) Platform is really well designed and easy to use.  It is actually designed to help portfolio managers balance and manage a portfolio of stocks.  Most portfolio managers are not buying and selling shares based on technical indicators like MACD, RSI, or Moving Averages; they are buying and selling based on the fundamentals of a particular company.  This is reflected in the unique parameters available.

The Best Fundamental Backtester Interactive Brokers

You can choose a portfolio to backtest based on nearly all critical fundamentals, such as P/E, EPS growth, and even Analyst ratings.  It is really unique and powerful.  I enjoyed setting up my portfolio and testing the different scenarios, such as buying low P/E stocks with high analyst ratings from Zacks or high EPS growth stocks with small insider ownership.  Interactive Brokers are a truly unique broker with arguably the most robust portfolio of tools in the industry.

Configuring A IB Backtest With TWS Portfolio Manager

I am a big fan of TWS and interactive brokers; I recently moved my account from TD Ameritrade to IB.

Configuring Backtesting With Interactive Brokers

In this basic backtest, I selected stocks with a price between $5 and $500 and a low price-earnings ratio (P/E) or between 5 & 20.  I used 128% leverage on my long trades and 50% on short trades and only targeted the technology stocks on the S&P500.

Below you can see the “Add Additional Filters” dropdown menu, where there is a wealth of factors you can consider and test.

The testing worked out positively (as you can see from the image above), beating the market by 31%, but mostly because of the leverage factor, which, of course, introduces increased risk.

It is a positive playground to test your wildest hypotheses against reality when it comes to investing rules.  Value investors take note; this is a really great tool.

 

Overview Video of Portfolio Analyst – Trader Workstation

Interactive Brokers offers by far the best free services in the area of research.  Here is a snapshot of some of the services you will get for free.

  • IB Market Signals
  • IB Traders Insight
  • Morningstar equity ownership
  • Thomson Reuters (in 10 languages), stock reports, news, fundamentals
  • Zacks Investment Research
  • Real-time News Streaming

In terms of customer service, they offer the full package of telephone, chat & email contact, so no issues there.

Interactive Brokers (IB) Backtesting Summary

IB is a very high-quality company with the very best research included for free in your account; the wealth of tools available is astounding.  I like Portfolio Manager” because it offers something different to everyone else, backtesting and investment management based on the company fundamentals.  Portfolio rebalancing and management with automated buying and selling are all included in the package for free, a world-class solution from an outstanding broker.

 

6. Tradestation: Great Chart Backtesting For Tradestation Brokerage Clients

TradeStation is a leading brokerage house with excellent execution and reasonable commissions, but did you know they have great software also.  TradeStation offers enough in its software and broker integration to stand tall with the other vendors.

Price: $0 For Clients
Trade Commissions: $5
Rating:

Pros

Powerful Charting Tools
Good Algo and Power Tools
Free Software for Brokerage Clients
Perfect Broker Integration

Cons

$5 per Trade

Visit TradeStation

TradeStation has real-time news, which is an excellent service but only fails to score top marks here because it does not provide market commentary or a chat community.  But do you really need that?  Some people do; it’s a factor to consider. TradeStation offers TradeStation University and a huge wealth of online videos to help you master their trading platform.  They also have a morning briefing that you can tune into online, and their selection of professional analysts will give an opinion on the market action and potential strategies.TradeStation has also cultivated a systems and strategies marketplace called the “Strategy Network,” where you can purchase stock market systems from an ecosystem of vendors or even contract someone to develop your system for you in the “Easy Language” code.

TradeStation’s Backtesting Software

TradeStation’s unique proposition is that it enables you to create powerful technical backtesting scenarios directly from the charts.  No need for programming or script development; it is extremely easy.  Select your chart, timeframe, and indicators and then plug in what parameters you want for the buy and sell orders.  Long and short trades are all covered.

The beauty of it all is that because this is a broker integrated solution, you can turn the hypothetical system into an automated trading system with algorithmic trading applications.

TradeStation In-Built Backtesting On Charts

It is called TradeStation for a reason; it is the place where you can build a technical chart-based system and execute the system automatically.

Read the Full TradeStation Review

7. Quantshare: Low Price, Broker Agnostic Backtesting, But Challenging to Use

Recommended for Quantitative Analysts who develop powerful automated systems and value a huge selection of shared user-generated systems and powerful technical analysis tools.

Price: $245 One time license
Trade Commissions: N/A
Rating: 

Pros

Perfect For Quants Wanting To Automate Backtesting
Super Cheap
Active Community
Very Good Backtesting

Cons

Programming Knowledge Required
Poor Interface

QuantShare was new to me, and I was pleasantly surprised by the feature set.  Do you backtest, forecast, and program algorithms to get an edge in the market? Are you a hardcore programmer and mathematician, then QuantShare is for you?

Stock Systems and Backtesting

QuantShare specializes, as the name suggests, in allowing Quantitative Analysts the ability to Share stock systems.  This means they have a huge systems marketplace with a lot of accessible content that you can test and use.  If you have a programmatic mind, you can implement and test an endless list of possibilities.  They do also offer Point & Click implementation of systems. What is great is they also have Artificial Intelligence integrations via the AI Optimizer, which allows for the system to combine different rules to see which rules work best together.  They also have powerful prediction models using Neural Networks.  This is an advanced software for those with the inclination to test, forecast, and predict.

Ease Of Use

This software package is difficult to use, and the interface requires serious development effort.  The learning curve will take a time investment on your part.

 

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Summary: Stock Backtesting Software Review

Our rigorous selection process chose MetaStock for the most powerful backtesting and innovative forecasting platform with a deep ecosystem of community and partner support. Trade Ideas deploys powerful artificial intelligence systems to give you a very profitable edge in the stock market and is well worth the subscription.

TradingView offers global market access, the biggest trading social community in the world, and an intelligent and effective backtesting solution to individual stock testing and reporting.

Interactive Brokers brings simply the best solution for fundamental backtesting and portfolio management combined with one of the best brokers in the world.

TrendSpider is our winner for innovation and the hottest new entrant into the market.

Finally, TradeStation has first-class technical analysis based backtesting & auto trading without any need for programming.

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