Traders have been searching for reliable trend reversal indicators for as long as technical analysis has been around. While the directional movement index (DMI) predicts trend direction or significant price moves, the vortex indicator incorporates the concept of flow and vortex motions in the market to yield a more accurate prediction.
A lot of traders have asked me why we decided to implement a backtesting engine in TrendSpider. That’s a great question – because backtesting is an interesting thing, to say the least. Let’s start with a definition:
Backtesting is the process of applying a trading strategy or analytical method to historical data to see how accurately the strategy or method would have predicted actual results. (source)