Past performance based on back testing a strategy can be informative in identifying company characteristics that you like.

It is important to realise that past performance provides no assurance of future results. Factors such as the market, company fundamentals and sentiment can and do change.

Back testing strategies to assess results, by necessity, requires the use of rules. The rules can be simple but are fundamental in determining results.

• Buys assume the market opening price is attained on the trading day following a share being triggered for purchase. This is attainable as the ASX allow pre-market opening offers to be set that will be at the opening price.
• Sells assume the market opening price is attained on the trading day following a share being triggered for sale. This is attainable as the ASX allows pre-market opening offers to be set 'at market' which will result in you achieving the opening price.
• Weighting of holdings assumes one share is bought in each company irrespective of share price.
• Brokerage costs are not taken into account in the recorded share price or calculation of performance.
• Performance is calculated in the following manner:
  • If a sell takes place in a calculated period (weekly/monthly) the resulting value is reflected by calculating the profit/loss (sell price minus the buy price) against the buy price.
  • If a stock is held (a buy has occurred but as yet no sell) it is described as a position. Positions are calculated using the following:
    • Accumulating daily calculations (running totals) as if each stock was realised (sold) at close of trading day price (closing price)
    • Displaying end of calculated period values
    • Weekly calculating periods are from Monday through Friday
      • If there are public holidays it is then calculated from the 1st trading day of the new trading week to the last trading day of the new trading week
      • For intra periods (within the week) the calculating period is from the 1st trading day of the new trading week to the close of the latest trading day
    • Monthly calculating periods are from 1st trading day of the month to the last trading day of the month
      • If there are public holidays it is then calculated from the 1st trading day of the new trading month to the last trading day of the new trading month.
      • For intra periods (within the month) the calculating period is from the 1st trading day of the new trading month to the close of the latest trading day.
    • The calculated period Return (%) has two composite components:
      • 1. Low – the poorest performing period. Remember that the displaying value reflects a realised outcome. Be aware that many strategies show a negative ‘low’ for a given calculated period that may not have been experienced unless you had to liquidate all positions at that time.
        2. High - the best performing period. Again remember that the displaying value reflects a realised outcome.
    • The calculated period Overall (%) has three components:
      • 1. Low – the result of the 1st period.
        2. High - the highest total performance value for the entire period. Again please remember that the displaying value reflects a realised outcome.
        3. Overall – the performance value of the strategy if it had have been realised at end of previous trading day’s closing prices.
  • Benchmarking is automatically provided for the market (XAO) and additionally for the source used if other than the XAO.