On to our charts. We can see that both stocks A and B have pulled back and held their 20-day moving averages (the yellow lines). So far, so good. Stock A Source: thinkorswim® Stock B Source: thinkorswim Here's where we bring in the stochastic oscillator. Basically, this is a...
After the backtest runs, it provides a comprehensive set of metrics including Profit Factor, Average Gain/Loss, the necessary Buying Power, Win Rate, and even a Projected Annual Return. The overarching aim is to give a snapshot of how much potential profit or loss the strategy would’ve acc...