Backtesting with tick-by-tick mode in ProRealTime provides a more accurate simulation of real market conditions by analyzing each individual price movement within a bar. This method offers a detailed view of how your trading strategy would perform in live trading scenarios.​

Benefits of Tick-by-Tick Backtesting

1. Enhanced Accuracy: Standard backtesting evaluates trades based on the open, high, low, and close prices of each bar, potentially missing intrabar price movements. Tick-by-tick backtesting considers every price change within each bar, leading to more precise results. ​

2. Realistic Order Execution: By analyzing each tick, this mode provides a more realistic simulation of order executions, especially for strategies sensitive to intrabar price fluctuations. ​

3. Improved Risk Management: Understanding how prices move within a bar allows for better assessment of stop-loss and take-profit levels, leading to more effective risk management.

How to Enable Tick-by-Tick Backtesting in ProRealTime

1. Open Your Strategy: Navigate to the ProBacktest module and select the trading strategy you wish to test.​

2. Enable Tick-by-Tick Mode: Check the box labeled “Use tick-by-tick mode” in the backtest settings tab.​

3. Run the Backtest: Execute the backtest as usual. The platform will now process each tick within the selected timeframe, providing a detailed analysis of your strategy’s performance.​

Considerations

• Performance: Tick-by-tick backtesting requires more computational resources and may take longer to complete, especially for extensive datasets.​

• Data Limitations: ProRealTime may limit the amount of tick data available for backtesting due to data available from the market. An alert will flash if tick data are not available for the considered period.

• Tick-by-tick testing in backtests are used to test if the order could have been stopped because of price crossing target profit or stoploss prices. It doesn’t mean that it runs the code on each tick.
• Behavior of code is always: read at Close and orders launched at next open, with or without tick-by-tick box checked.
• During optimization, no tick by tick tests are made, even if the box is checked. To get a valid tick by tick backtest, you must run the tested occurence from the optimization window individually.​

By enabling tick-by-tick mode, you gain a comprehensive understanding of your trading strategy’s behavior, leading to more informed decision-making and potentially better trading outcomes.