SFX Backtester: Entry Conditions

The SFX Backtester allows users to create, backtest, and automate strategies using features from the SFX Algo Toolkit. This article explains how each entry condition functions in the SFX Backtester for building long and short strategies.

Steps Explained

Before you create a strategy, it's important to understand how to use steps. Within the SFX Backtester, you can create long and short entry conditions that are triggered when a certain set of criteria is met while following an order.

Consecutive Steps

If you’re creating a strategy with three steps, you can set your conditions in order as Step 1, Step 2, and Step 3.

If your strategy only requires two steps, but one step can be met by either of two conditions, assign both conditions to the same step. For example, if Step 1 can be satisfied by detecting either a Bullish Signal from the chart's timeframe or a Bullish Signal from a higher timeframe chart, both conditions should be labeled as Step 1. In short, assigning multiple conditions to the same step means the step is satisfied if any of those conditions are met.

Entry Conditions

The SFX Backtester can use the following conditions for entry conditions.

Bullish Signal

• Bullish Signal: Triggered when a classic bullish signal is detected

• Bullish+ Signal: Triggered when an upgraded bullish signal is detected

Bearish Signal

• Bearish Signal: Triggered when a classic bearish signal is detected

• Bearish+ Signal: Triggered when an upgraded bearish signal is detected

Take Profit

Take-Profit (TP) triggers are based on the TP settings users select for the SFX Algo Toolkit under the Take Profit / Stop Loss Settings within the SFX Backtester settings:

• Bullish Signal | TP 1: Triggered when TP 1 is reached from a bullish signal.

• Bullish Signal | TP 2: Triggered when TP 2 is reached from a bullish signal.

• Bullish Signal | TP 3: Triggered when TP 3 is reached from a bullish signal.

• Bearish Signal | TP 1: Triggered when TP 1 is reached from a bearish signal.

• Bearish Signal | TP 2: Triggered when TP 2 is reached from a bearish signal.

• Bearish Signal | TP 3: Triggered when TP 3 is reached from a bearish signal.

Stop Loss

Stop-Loss (SL) triggers are based on the SL settings users select for the SFX Algo Toolkit under the Take Profit / Stop Loss Settings within the SFX Backtester settings:

• Bullish Signal | SL: Triggered when the SL is reached from a bullish signal.

• Bearish Signal | SL: Triggered when the SL is reached from a bearish signal.

Retracement Wave

• Bullish R. Wave Retest: Triggered when price retests the Retracement Wave when it's bullish. A retest is confirmed when a candle enters the retracement wave and closes outside of it.

• Bullish R. Wave Retracement: Triggered when price touches the Retracement Wave when it's bullish.

• Bearish R. Wave Retest: Triggered when price retests the Retracement Wave when it's bearish. A retest is confirmed when a candle enters the retracement wave and closes outside of it.

• Bearish R. Wave Retracement: Triggered when price touches the Retracement Wave when it's bearish.

Volatility Bands

• Bullish V. Bands Retest: Triggered when price retests the lower or bullish Volatility Bands. A retest is confirmed when a candle enters the lower bands and closes outside of it.

• Bullish V. Bands Retracement: Triggered when price touches the lower or bullish Volatility Bands.

• Bearish V. Bands Retest: Triggered when price retests the upper or bearish Volatility Bands. A retest is confirmed when a candle enters the upper bands and closes outside of it.

• Bearish V. Bands Retracement: Triggered when price touches the upper or bearish Volatility Bands.

Timeframe Conditions

The SFX Backtester supports Multi-Timeframe (MTF) features. When setting an entry condition, you can also choose the timeframe this condition must be met on.

This example illustrates a condition for a Bullish Signal from the 1-hour timeframe to be detected.

External Conditions

Users can use external indicators on the chart to set entry conditions.

The second dropdown in the external condition settings allows you to choose a conditional operator to compare external outputs. Available options include:

• Less Than or Equal To: <=

• Less Than: <

• Equal To: =

• Greater Than: >

• Greater Than or Equal To: >=

Here is an example of the external condition being set for price closing above an Exponential Moving Average (EMA).

Session Conditions

The SFX Backtester allows traders to choose when to execute trades and when to not execute trades.

Only Take Trades

This setting lets users specify the time period when their strategy can open or execute trades.

Don't Take Trades

This setting allows users to specify periods when their strategy can't open or execute trades.