Fine Tuning Strategy
With Falcon7, you can not only create strategies but also fine-tune them. Fine Tune Parameters enables you find the best suitable parameters of your selected study for each scrip. It tells which combination of parameters gives you the highest profit and which gives the worst. Our engineers have calculated profit up to three crores using this feature! It depends on spotting the smart combo of study, signals and conditions.
Time Required: 20 min
Fine Tuning Strategy
Go to Strategy-> Fine Tune Strategy Parameters as shown in figure 1.
The following figure shows a fine tuned strategy and its cumulative profit
It is always better to have a saved strategy before proceeding with this function
· Open a chart
· Add your favorite study
· Add signals
· Make a strategy via strategy settings form
· Save this whole strategy (study, signals and strategy) as a file.
· Go to Strategy - Fine tune Strategy Parameters.
· Give a name for the strategy which you are adding against Strategy Name field.
· Click on Select Scrip.
· Select the data period- Daily/ Weekly/Monthly/ Quarterly/ Yearly in the drop down box.
This option is enabled only after scrip selection.
Already Saved Strategy
· Click on Studies.
· Click on Load Studies in Study Manager box.
· Select your Strategy file from Load Studies box.
· Click on Apply.
· In case you have not saved a strategy or want to add a new one, click on Add button in Study Manager box. Subsequently, add study, signals and then strategy. Click on Apply.
· Now the Fine Tune option will be enabled; click on it.
· In Primary Parameters, select two parameters. Suppose your strategy is on average based parameters, select fast average as the first parameter and medium average as the second parameter.
· Similarly you may add Secondary Parameters.
· Suggest Step suggests the step value that will be accurate for the selected parameters. This function is helpful to reduce the number of calculations. This option does not hamper you from getting good results, just reduces the number of results.
· Click on Apply.
Clear Fine Tune
Allows you to clear the fine tuned parameters.
You can set the capital, maximum holding days, intraday rules etc using this option. [Refer Strategy Settings]
You can Hide Loss Making Parameters by ticking the checkbox. It will not display the loss making parameters in the profit chart.
You have the option of Save Optimum Parameters to save the studies with optimum parameters i.e. those combinations that give maximum profit. Firstly, check on Select Optimum Parameters. Then double-click on the parameters giving maximum profit; Now click on Save Optimum Parameters button.
· A prompt box will appear. Fill in the details. Note that filename cannot be changed as you cannot edit the parameters’ values.
· Similarly you can click on the profit graph that shows maximum profit and the parameters will get selected. Now click on Save Optimum Parameters button.
· Report will be displayed in Report tab. Result for each combination of parameters will be displayed in ascending order.
· Click on any column head to view the list according to the ascending or descending order of its values; by default the results are displayed, as mentioned above, according to ascending order of parameter values.
· You can view the profit graph for different parameter values in Profit tab.
· Different colours are assigned for each parameter combination, and each coloured graph line shows the variation of parameter combination with profit. If you click on Profit column head the results will be displayed in ascending order of profit i.e. the most loss-making parameter combination will be displayed on top and the most profitable in the bottom.
· If you again click on Profit column head, the results will be rearranged in descending order of profit i.e. most profitable parameter combination shall be displayed on top.
Avg Profit & Std Deviation
· Similarly you can see the comparative graph of average profit and standard deviation in Avg Profit & Std Deviation tab. Note that this deviation is shown with respect to only one parameter
Displays the report of fine-tuning
· Column1: Lists Parameter1’s values in this column.
· Column 2: Lists Parameter2’s values in this column.
· Column 3: Lists Parameter3’s values in this column.
· Column4: Lists Parameter4’s values in this column.
Column 3 and 4 will be visible only if you conduct fine tune upon the 3rd and 4th parameters
· Strategy_Cumm Profit Amount: Cumulative profit amount obtained
· Total Trade: Total trades carried out
· Long Trades: Number of long trades carried out
· Short Trades: Number of short trades carried out
· Total Profitable Trades: Total number of profit making trades carried out
· Total Loss Trades: Total number of loss making trades carried out
· Total Profit: Total profit obtained
· Profit %: Total profit in terms of percentage
· Average Profit: Average value of profit
· Avg Profit%: Average profit in percentage
· Max Cummulative Profit: Highest profit value in the chart
· Max Cummulative Profit%: Highest profit in percentage
· Max Cummulative Loss: Highest loss value in the chart
· Max Cummulative Loss%: Highest loss in percentage
· Capture Efficiency: Calculated using the formula: Actual Profit/Potential * 100
You can obtain an excel copy of this report of fine tuning
· You can get a summarized report by clicking on Show Details. The report is divided into five tabs- Summary, Trade-wise, Date-wise, Strategy Settings and Ignored Signals.
Summary: Shows the number of Long and Short trades, trade, profit making trades as well as loss making ones, even your Capture Efficiency, etc. The details about the above said are available under the Display Grid.
· Total Transaction Cost is the total transaction cost calculated as per Round Trip Transaction Cost under Strategy Settings.
Trade-wise: Shows the following details according to each trade.
§ Trade No- No of the trade carried out
§ Trade type- Long or short trade
§ Qty – quantity purchased (capital/price-line in Strategy Study)
§ Entry Date – Date on which trade was carried out
§ Entry Rate – Rate at which transaction took place
§ Exit Rate – Rate at which the position was squared off
§ Exit Date - Date on which trade was squared off
§ Reason – Reason for closing the position
§ Profit – profit gained from the transaction
§ Profit % - profit in terms of percentage
§ Days - No of days the position was open
§ Potential- Maximum possible profit that could have been gained in that period
§ PotentialPcnt – Maximum potential profit in terms of percentage
§ DrawDown – Maximum possible loss that could have been incurred in that period
§ DrawDownPcnt – Maximum possible drawdown amount in terms of percentage
§ TransactionCost – Amount calculated as per Strategy Settings Round Trip Transaction Cost
Date-wise: Shows details about the date wise buy, sell, quantity and profit gained.
Simply lists the settings of the strategy; you had made these settings in the selected strategy in Strategy Testing category in Add Study box.
Ignored Signals: Shows the date on which trade was ignored due to some reason.
Saving and Loading Analysis
· You can save the Optimization query by clicking on Save Analysis.
· Later, if you want to load the same query click on Load Analysis.
Try practicing the following activities for your understanding:
Time Required: 10 min