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Backtester (OSC)
By LuxAlgoNov 21, 2023
The Backtester (OSC) is the strategy-script companion to LuxAlgo's Oscillator Matrix™: it converts the toolkit's oscillators and signals into strategy entries and exits so momentum ideas can be measured instead of assumed. Trend-following and contrarian traders alike can encode their reading of the pane (a divergence into an oversold cross, a money flow filter, an overflow exhaustion) and see how the rules would have traded.
What's Inside the Backtester (OSC)?
- Step & Match algorithm: every condition carries a Step number; conditions on the same step are evaluated together as matching requirements, while different steps form an ordered sequence that opens a market order once its final step is true. Sequences and matches combine freely, so one stage can demand several simultaneous conditions.
- HyperWave conditions: the normalized adaptive oscillator that reflects price trends without excess noise provides crossings and level-based entries. The documented examples use crosses of 50 for entries and of 80/20 for exits.
- Smart Money Flow conditions: the participation oscillator whose readings above 50 suggest bullish market participants, below 50 bearish, usable as an entry condition or as a filter on other conditions.
- Overflow conditions: the derived overbought/oversold detector based on participant activity, flagging excess that often precedes reversals.
- Reversal signal and divergence conditions: proprietary reversal signals and real-time divergence detection act as direct entry triggers for contrarian strategies.
- Oscillator confluence: a condition expressing how aligned the toolkit's oscillators currently are, for strategies that only act on agreement.
- External sources: any external indicator can define entries, exits, or take-profit/stop-loss triggers, for example TP/SL levels set a multiple of ATRs away from entry, or conditions built on another LuxAlgo toolkit's features.
- Complete alert system: every strategy action can notify you, with per-action custom messages via the Alert Messages settings and defaults otherwise.
How to Trade with the Backtester (OSC)?
- Start from a documented template: the contrarian example enters long on a HyperWave bullish divergence matched with an oversold HyperWave under 20, and short on the bearish mirror, a two-condition match that captures reversal logic cleanly.
- Filter trend entries with participation: another documented strategy goes long on the HyperWave crossing over 50 while money flow is bearish (deliberately hunting early turns), with profit exits on the HyperWave crossing 80 or 20.
- Sequence multi-stage setups: steps express "this, then that" (for example a reversal signal only counting after a prior condition completes), which is how the script encodes ordered confluence rather than coincidental overlap.
- Add explicit risk boundaries: take-profit and stop-loss conditions from external sources, such as levels a fixed number of ATRs from entry, keep win rates and losses interpretable across instruments.
- Make the test honest before reading it: the published preview runs on daily data with a 10,000 balance, 10% equity orders, a commission approximating the instrument's average spread, and slippage, and the authors strongly recommend adjusting Strategy Properties to your own account and market, since defaults such as 1-contract sizing exist only for broad instrument compatibility.
Key Settings & Modes
- Step dropdown beside each condition: selects matching versus sequenced evaluation.
- Entry conditions from HyperWave, Smart Money Flow, Overflow, reversal signals, divergences, confluence, and external sources, for both long and short sides.
- Exit conditions including long/short take-profit exits (the documented "long exit tp" / "short exit tp" pattern) and external TP/SL sources.
- Alert Messages: custom message field per strategy action, defaults when unset.
- Strategy Properties: balance, order size, commission, and slippage. Align these with your account before interpreting any statistic.
