Using the Amibroker is as simple as having a trading strategy back-testing it and then scanning the stock market through its powerful explorer.
Today you will learn exactly how to use Amibroker. The software is so powerful in the stock market to help traders.
So if you want to go from rookie to professional, this guide is for you.
Let get started.
- Have a trading strategy
- Get reliable data
- Learn AFL programing
- Back-test your strategy
- Scan stocks based on criteria
The above list is all you need in stock trading to profit in the markets. However, the actual process is laborious to do for beginners.
The best stock trading back-testing tools online is Amibroker to good trading strategies.
I will share with you the methods I use with Amibroker to find outstanding stocks to buy. Well, I don’t short securities because, in the long run, it is not profitable. Time is your biggest enemy because the longer you hold the stock, the more interest you pay. (Source)
I also use a back-tested strategy in the market during trading or off-market hours. You can look at our recommended strategy post to find out more.
Based on my experience, using Amibroker after the close of the day is more cost-efficient because you do not have to pay for market data.
Update the software with end of day stock quotes, and most brokers offer delayed day.
However, you need real-time data if you are a day trader. Of course, the cost will be high, and it will reduce your profits in the long run.
Be smart, and data providers charge high costs to provide accurate data. The monthly fee could reduce your profits by over 5%. For example, an annual profit of 10% percent is not enough if your total monthly cost is about half of it.
Reducing your fees can improve your income in trading stocks. Most traders overlook the cost of services.
What is Amibroker?
Amibroker is a trader’s tool for charting, back-testing trading strategies, optimizing strategies, and technical analysis. Its best feature is the back-testing capability, useful for validating trading systems for auditing the system’s reliability. The system’s reliability is further enhanced with Amibroker’s optimization feature.
Now, let’s go to the step-by-step guide.
1.Have a trading strategy
You should already have a reliable trading strategy before you use Amibroker. Otherwise, you will waste your money by buying the software.
The Amibroker costs:
- Standard edition: $279
- Professional edition: $399
- Ultimate Pack Pro: $499
Note on Amibroker monthly charges: Amibroker has no monthly charges unless it has subscriptions to real-time data.
As you can see, the tool is expensive to buy. However, I highly recommend Amibroker in your trading to use an excellent strategy.
What will you do after you installed it on the computer?
Most traders invest in a trading app, and they do not know how to use it. They think that buying tradings can help them even though they don’t have a trading system.
To get fast results, look for a proven strategy first, and then you can backtest the strategy with Amibroker to validate it.
You can also use the software to scan the markets fast. Later on, you learn how to create an AFL to find profitable stocks.
I will show you how simple it is to code it.
You can read the recommend trading strategy above to learn more about it.
Amibroker is a powerful tool for traders, yet without a strategy, it is useless. Do not buy it unless you already know how to use it.
When I started trading, I did not know about Amibroker, but now I use it every day. The more you use it, the more you will love it.
Do people make money by using trading software?
My answer is yes and no.
A tool is only as good as the user. How you use Amibroker in stock trading will determine your results.
If you use it wisely, you will profit from the markets.
You can only do that with a good trading system. I hope that I have convinced you to look for a trading strategy first.
Do not concern yourself with trading tools. Read books and watch online videos to learn a lot about trading.
The next step is getting accurate data. To use Amibroker properly, test your strategy with reliable price history, yet service providers will charge you a hefty amount.
2.Get reliable data
Amibroker is useless without reliable data. The software could give inaccurate results during back-testing and scanning.
When I back-tested a trading strategy years ago, the result was profitable. However, when I reviewed the trades, some are inaccurate.
Little did I know that there are stock splits on the stocks. Monitor changes in the outstanding shares of the company to correct the data.
You can go to the official website of the stock market. In there, you can see the latest news about the equities.
Stock splits could ruin the backtest results if you did not update it in Amibroker. Some traders buy from Norgate, to be sure.
Of course, the data is expensive, and I do not recommend it for retail traders. However, if you have extra funds, you can always buy them. Otherwise, just use the free source, but do not forget to adjust for stocks splits.
A lot of traders miss this, and I hope you are not one of them.
Now, let us talk about the sources of historical prices. Some are free, while others are expensive to subscribe.
I always recommend the free ones that are available for download from where you trade.
The best source to get free data is through your broker, but not all service providers will give you that.
I will not list all the companies in this post because it is a different topic.
In my country, the stock market allows traders to download end-of-the-day data in PDF format. I have to convert it first to CSV files so that I can import it to Amibroker.
My broker also gives the same data in CSV format.
Does your broker provide free data?
I know a lot of them to do that.
You should select a broker that gives historical prices for free.
3. Learn AFL programing
Amibroker is not useful without the ability to code AFL, and you must learn the basic syntax.
You can watch a video I have created for stock trading to showcase the power of this software. (Video)
However, you need to have a trading strategy to code it properly. We already have discussed the value of a system so that you can use Amibroker the right way.
For example, coders may use this script to buy at moving average crossover.
You can watch tutorials on YouTube for free, and you do not have to pay a dime.
I learned to code AFL by searching online to avoid the extra cost.
Amibroker is already expensive, and I do not want to pay more.
I struggled at first, yet I persisted and succeeded. All I did was a lot of research.
In the beginning, you will have a hard time coding the AFL, but in the following months, it will be simpler for you.
Do not forget about position sizing when you code the script for back-testing later on.
I will not teach you how to code here to give you the best way to use Amibroker. Rather, you can look at our sample screeners above.
The page is about popular AFL to scan excellent stocks. In there, I have created a video that shows you how to set it up.
For example, the code can scan for Darvas box or bull flags. Also, I shared what Stockbee said about scanning for a 5-day breakout to improve your trading.
I have created many tutorials on this website to help you create your own.
Just search for momentum to learn more.
If you already have a trading strategy, you can code the AFL yourself or pay someone to do it.
I did that the first time I heard about Amibroker.
4.Back-test your strategy
You have found a trading strategy in your research, now, what should you do?
Well, you should backtest it with Amibroker to see if it works. Also, you can only do that if you know how to use AFL in the software.
Most traders fail in stock trading because they did not test the system they found on online courses, books and trading materials.
They immediately trade the strategy without proper back-testing. In the end, traders thought they are using an excellent method, but they are wrong.
Do not be like them and be a professional trader.
Use Amibroker for back-testing to see if the strategy you have is reliable or usable.
After you do that, following your trading plan will be a lot easier because you know it works.
You will take positions in the stocks with confidence.
That’s how professional traders do it, and they know back-testing is important.
Do you want to earn a living by trading?
I know you do because you have read this post.
Well, I suggest you learn the art of back-testing a trading strategy to improve your selection of stocks.
5.Scan stocks based on criteria
After back-testing, it is time to use Amibroker for screening stocks. You can use the exploration feature of the software.
You can find examples of AFL codes in the screener link above. You can use it for free, and you can change it to improve its profitability.
If you have questions, please leave a comment below.