Portfolio Boss Documentation

Chart Tab



The Chart Tab is located at the Reports Area of the “Backtest Strategy” page.

It shows the performance graph of the strategy against a benchmark. The “performance” here is the capital growth over time. So when you're crafting a strategy, this is the first thing you should see each time you do a backtest. Not only you see the growth of the investment, but the greatest drawdown it has suffered. It's also an easy way to see how the strategy performs when the benchmark (the market in general) suffers bear markets.



1.  The light-green graph shows the strategy's performance, while the blue graph (or darker shade of green) shows the benchmark's performance.




2.  The horizontal and vertical axes represent time (daily), and account size (portfolio size) in percent of the initial capital, respectively. These axes will change their interval values once you zoom-in the chart.



These equity curves are shown in percentage terms, not the dollar value. And they start at 100% (bottom-left corner), because that's the original amount of your account size. So a value of 200% means it's currently at 2x or twice the original amount, 50% means it's half of that, etc.

But for ease of understanding, you can simply think of the percentage here as the actual dollar value and you'd still be correct. Just remember that your initial capital was at $100, so if the equity graph reads 10,000% for example, it's as if your $100 has grown to $10,000.



3.  The red shaded area shows the deepest drawdown the strategy experienced during the whole backtest period. It goes from peak to trough, and it's what you see as the Max Drawdown metric.



This red area doesn't show the entire duration of such drawdown (from the last highest peak to the new highest peak). Note, the benchmark doesn't have its greatest drawdown shown.



You can hide this red area by unticking the “Max. drawdown” checkbox at the top.



4.  The grey shaded area represents the backtest period reserved for out-of-sample testing.



You can set the in-sample and out-of-sample ratios with the “In Sample Periods” section (at the Backtest Panel).



5.  To view the chart around, click and drag it left or right. You can also zoom in and out with the mouse scroll-wheel. To revert to the default zoom level (general overview), double-click the chart. 



Alternatively, you can use the bottom scroll-bar to manipulate the views: drag it left or right to pan the chart, and shrink/expand it (by dragging its tail/head) to zoom in and out. You can also right-click the chart to show a tooltip on your cursor, which shows the date you're hovering at, and the percentage value of both the strategy and the benchmark. When hovered over the red area, the tooltip also shows the percentage drop from the last peak:




6.  Change the chart appearance with the “Chart Type” parameter on the top-left corner. “Line” is the preferred type here, as it shows two distinct charts (strategy and benchmark) clearly, without overlapping shades.



“Mountain” shows the two charts filled with their respective colors; this is good if the strategy and benchmark performs quite differently, thus the difference in performance seems even more apparent. Otherwise the colors may overlap in and out, and it can get confusing.



“Column” shows a bar chart instead of a continuous graph line. If you zoom in closely (which is the intended way to use this chart type), you can see each bar represents a single day, and each contains both the strategy and benchmark's values. 



This is good if you want to get precision reading on the chart (the exact values contained in each day). The tooltip also “snaps” to each single day, instead of wandering around.

Now, if you right-click and look closely on any chart types, there are two dots and a line connecting them. You can use these as visual aid when comparing the curvature of the two equity graphs.




7.  On the parameter “Y Axis”, you can define how the chart's vertical axis is mapped out. “Logarithmic” is the default mode: it uses logarithmic scale for a fairer presentation of the changes in the equity graphs' value.



For example, a change from 100% to 1,000% would appear in the same distance as the change from 100,000% to 1,000,000%. Both changes represent a ten-fold increase of the investment value, hence they're displayed in the same distance for better clarity.

In a “Linear” scale, the change from 100,000% to 1,000,000% would cover 1,000 times the distance of 100% to 1,000%, which means small changes can't be seen clearly on the chart as they're too subtle (remember the chart may range from zero percent to millions of percent). But the “Linear” mode is good for understanding the real or actual distances between values; for example, a benchmark that tops out at 1,000% return would appear completely low compared to the backtest that returns 5,000,000%. 



“Logarithmic” scale is more suited for equity graphs. It shows the changes accurately: for example, losing $50 on a $100 balance hurts bad, ditto losing $50,000 on a $100,000 balance feels about the same, as it's the same 50% reduction in balance. If you lost $50 on a $100,000 balance, it's a pinprick.






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