Creating a new simulation

There are three options for creating a new simulation, each of which will bring up the simulation parameters page (described in the next section). The first option is to visit the strategy page and click on the 'create simulation' link for any of the saved simulations:

The second method is to click on the simulate this strategy quick link while viewing any strategy. The advantage to this method is that you do not have to save the strategy before simulating it, so you can quickly launch multiple simulations with slightly different strategy settings.

The third method is to click on the create new simulation quick link while viewing any simulations page.

Simulation parameters

Any of the methods described above for creating a new simulation will bring up the simulation parameters page:

The parameters required for each simulation are detailed below:

• simulation name - the name to be used for this simulation. you will reference this name later when viewing simulation results, so we recommend that you use a descriptive name.
• strategy - the strategy to use for this simulation. the strategy will appear as a selection of saved strategies if you reached this page by the 'create new simulation' link. otherwise the name of the strategy will be shown (the strategy is fixed because this page was reached from a strategy link).
• from - the starting date for the simulation
• to - the ending date for the simulation
• price - the price at which the autoinvestor will buy a stock. See the section on simulation price execution, below.
• commission - the commission to use during the simulation. This can be specified in dollars (e.g. $29.95/trade), dollars per share (e.g. $0.01/share) or percent (e.g. 1% of traded amount/trade).
• starting balance - the initial dollar amount for the simulated portfolio.
• notes - any notes which you wish to make regarding the current simulation.

Press next to start the simulation or cancel to return to the strategy page.

Simulation started message

Pressing next takes you to the 'simulation started' page:

The simulation started page indicates that your simulation was successfully started. You have the option of (1) creating a new simulation using the same strategy; (2) going back to the strategy settings page to further refine your strategy or (3) viewing the simulation status list to check the status of all of your simulations.

Stockworm uses a 'queue' to run simulations which means that your simulation waits until other simulations which have been submitted before yours are complete. For this reason, you may find that the same simulation takes a different amount of time to run (depending on the number of simulations submitted before yours).

Simulation price execution

To understand the simulation price options, you must first learn a bit more about how simulations are implemented in the Stockworm system. The autoinvestor simulation algorithm is a two step process for each date simulated. First, a recommended update to the simulated portfolio is created using only data from the previous date. Then the recommended update is applied to the portfolio using pricing data on the simulation date. This two step process simulates how a user would trade a real portfolio: step 1 would be to receive an autoinvestor email which is based upon the previous day's fundamental and pricing data and step 2 would be to trade the recommendations (using the current day's pricing).

With this background, we can now present the options for the price used in trade execution (step 2):

• last closing price - execute trades at the previous day's close.
• opening price - execute trades at the open on the simulation date.
• median price (default) - execute trades at median price = (high+low)/2 on the simulation date.
• buy high, sell low (worst case) - execute long purchases (short sales) at the high price and long sales (short purchases) at the low price on the simulation date.
• limit last close - execute trades at the previous day's close only if the previous day's close is less than or equal to the simulation date high (long purchase, short sales) or greater than or equal to the simulation date low (long sales, short purchases). Otherwise, do not execute the recommended trade.
• limit last close and by trading volume - Use the 'limit last close' restrictions with the addition of a check for the feasibility of trading: the simulation date trading volume must be greater than or equal to 5 times the requested shares to be bought or sold. Otherwise, do not execute the recommended trade.
• limit last extreme - execute trades at limits based upon previous day's extreme (high/low) pricing as follows: For long purchases (short sales), if the simulation date low is less than or equal to the previous day's high, execute at the minimum of the simulation date median and the previous date's high. For long sales (short purchases), if the simulation date high is less than or equal to the previous day's low, execute at the maximum of the simulation date median and the previous date's low.
• limit last extreme and by trading volume - Use the 'limit last extreme' restrictions with the addition of a check for the feasibility of trading: the simulation date trading volume must be greater than or equal to 5 times the requested shares to be bought or sold. Otherwise, do not execute the recommended trade.
• custom - Use the 'custom' option to independently select the buy and sell execution pricing.