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.. _backtest:
============================================
Intraday Trading: Model&Strategy Testing
============================================
.. currentmodule:: qlib
Introduction
===================
``Intraday Trading`` is designed to test models and strategies, which help users to check the performance of a custom model/strategy.
.. note::
``Intraday Trading`` uses ``Order Executor`` to trade and execute orders output by ``Portfolio Strategy``. ``Order Executor`` is a component in `Qlib Framework <../introduction/introduction.html#framework>`_, which can execute orders. ``VWAP Executor`` and ``Close Executor`` is supported by ``Qlib`` now. In the future, ``Qlib`` will support ``HighFreq Executor`` also.
Example
===========================
Users need to generate a `prediction score`(a pandas DataFrame) with MultiIndex<instrument, datetime> and a `score` column. And users need to assign a strategy used in backtest, if strategy is not assigned,
a `TopkDropoutStrategy` strategy with `(topk=50, n_drop=5, risk_degree=0.95, limit_threshold=0.0095)` will be used.
If ``Strategy`` module is not users' interested part, `TopkDropoutStrategy` is enough.
The simple example of the default strategy is as follows.
.. code-block:: python
from qlib.contrib.evaluate import backtest
# pred_score is the prediction score
report, positions = backtest(pred_score, topk=50, n_drop=0.5, verbose=False, limit_threshold=0.0095)
To know more about backtesting with a specific ``Strategy``, please refer to `Portfolio Strategy <strategy.html>`_.
To know more about the prediction score `pred_score` output by ``Forecast Model``, please refer to `Forecast Model: Model Training & Prediction <model.html>`_.
Prediction Score
-----------------
The `prediction score` is a pandas DataFrame. Its index is <datetime(pd.Timestamp), instrument(str)> and it must
contains a `score` column.
A prediction sample is shown as follows.
.. code-block:: python
datetime instrument score
2019-01-04 SH600000 -0.505488
2019-01-04 SZ002531 -0.320391
2019-01-04 SZ000999 0.583808
2019-01-04 SZ300569 0.819628
2019-01-04 SZ001696 -0.137140
... ...
2019-04-30 SZ000996 -1.027618
2019-04-30 SH603127 0.225677
2019-04-30 SH603126 0.462443
2019-04-30 SH603133 -0.302460
2019-04-30 SZ300760 -0.126383
``Forecast Model`` module can make predictions, please refer to `Forecast Model: Model Training & Prediction <model.html>`_.
Backtest Result
------------------
The backtest results are in the following form:
.. code-block:: python
risk
excess_return_without_cost mean 0.000605
std 0.005481
annualized_return 0.152373
information_ratio 1.751319
max_drawdown -0.059055
excess_return_with_cost mean 0.000410
std 0.005478
annualized_return 0.103265
information_ratio 1.187411
max_drawdown -0.075024
- `excess_return_without_cost`
- `mean`
Mean value of the `CAR` (cumulative abnormal return) without cost
- `std`
The `Standard Deviation` of `CAR` (cumulative abnormal return) without cost.
- `annualized_return`
The `Annualized Rate` of `CAR` (cumulative abnormal return) without cost.
- `information_ratio`
The `Information Ratio` without cost. please refer to `Information Ratio IR <https://www.investopedia.com/terms/i/informationratio.asp>`_.
- `max_drawdown`
The `Maximum Drawdown` of `CAR` (cumulative abnormal return) without cost, please refer to `Maximum Drawdown (MDD) <https://www.investopedia.com/terms/m/maximum-drawdown-mdd.asp>`_.
- `excess_return_with_cost`
- `mean`
Mean value of the `CAR` (cumulative abnormal return) series with cost
- `std`
The `Standard Deviation` of `CAR` (cumulative abnormal return) series with cost.
- `annualized_return`
The `Annualized Rate` of `CAR` (cumulative abnormal return) with cost.
- `information_ratio`
The `Information Ratio` with cost. please refer to `Information Ratio IR <https://www.investopedia.com/terms/i/informationratio.asp>`_.
- `max_drawdown`
The `Maximum Drawdown` of `CAR` (cumulative abnormal return) with cost, please refer to `Maximum Drawdown (MDD) <https://www.investopedia.com/terms/m/maximum-drawdown-mdd.asp>`_.
Reference
==============
To know more about ``Intraday Trading``, please refer to `Intraday Trading <../reference/api.html#module-qlib.contrib.evaluate>`_.