Tradewell Review – Is This Backtesting Tool Right For You?

Tradewell is a strategy backtesting platform for stocks, forex, futures, and crypto. It offers up to 100 years of historical data and data visualizations to help you identify indicators that correlate well with a stock’s price.

Tradewell takes a unique approach to backtesting, enabling you to dive deep into individual technical indicators and alternative data metrics rather than evaluating whole strategies. In our Tradewell review, we’ll explain how this system works and help you decide if it’s right for you.

Tradewell Pricing Options

Tradewell offers three plans: Free, Plus, and Professional.

The Free plan offers access to Tradewell’s backtesting tools with up to five years of historical data. It includes most common technical indicators to build your strategy and access to all of Tradewell’s data visualizations.

The Plus plan costs $30 per month and offers up to 20 years of historical data, including basic options and market breadth data. It also gives you access to several proprietary indicators created by Tradewell.

The Professional plan costs $60 per month and offers up to 100 years of historical data, including advanced options data like put-call ratios and implied volatility metrics.

Tradewell Features

Datasets

Tradewell offers up to 100 years of historical data for stocks, ETFs, mutual funds, forex, options, futures, and cryptocurrencies. Equities data includes more than 65,000 tickers in the US and Chinese markets. Advanced options data (available with the Professional plan) includes implied-realized volatility spreads, implied volatility term-structure, put-call ratios, and x-delta implied volatilities.

Tradewell also has alternative datasets such as:

• Google Trends search data
• Crude oil production and gas prices
• Government debt and gold reserves
• Macroeconomic data (inflation rates, unemployment rates, interest rates)
• Investment manager sentiment
• Dark pool trading volume

Backtesting

Tradewell’s backtesting tool is a little different from other backtesting software in that it doesn’t calculate historical performance for a fully-formed trading strategy. Instead, it enables you to evaluate one indicator or alternative data type at a time to see how it can be used in your trading strategy. 

As an example, say you want to check whether a trading strategy that uses an RSI below 35 as an entry point for Apple stock will be effective. You can then build a backtest for RSI with a customizable holding period—let’s use 20 days.

Tradewell will then display visualizations that show the historical return of each 20-day trading period that starts when RSI crosses below 35. It compares this average return to the average historical return of all other 20-day trading periods. A scatterplot enables you to visually compare the magnitude of average returns for 20-day signal periods vs. all other 20-day periods.

This approach can be confusing since it doesn’t necessarily tell you about a trading strategy, but rather about the potential usefulness of a single indicator as part of a trading strategy. However, it can be very useful if you’re in the early stages of building a trading strategy and want to know what indicators to include.

Tradewell offers a summary table that allows you to compare results over different trading period windows (for example, 10 or 60 days instead of 20 days). This can be useful for optimization.

Tradewell also allows you to transform indicators and data metrics to conduct a deeper analysis. For example, instead of backtesting RSI, you can backtest the rate of change of RSI. Other transformations enable you to backtest the moving average of a metric or its percentile within the backtest period. This gives you a lot more flexibility to look beyond absolute indicator values and get insights that aren’t possible with most backtesting or technical analysis tools.

Customization and Layout

Overall, Tradewell was somewhat confusing to use. It takes several steps to get from your account dashboard to the backtesting tool, and there are several filters within the backtesting module that aren’t well-documented. You also can’t export data from your backtests to create your own visualizations in Excel.

That said, you do have the ability to save backtests and return to them later. You can also annotate and save visualizations showing your backtest results.

Tradewell Platform Differentiators

Tradewell’s backtesting tool is unique, and possibly not what traders are expecting when looking for a backtesting software. Instead of helping you evaluate and optimize a specific trading strategy, it focuses on evaluating the correlation between a single indicator and a single ticker’s price movements.

This can be helpful if you want to evaluate a wide range of indicators to find out which ones work best for trading a specific ticker. However, Tradewell doesn’t offer a way to backtest entries and exit conditions that involve multiple indicators. So, it’s necessary to use Tradewell in combination with another backtesting software, like Trade Ideas, TradingView, or Thinkorswim, to fully formulate your strategy.

A major difference between Tradewell and these other backtesting tools is that Tradewell includes alternative data. This can be a major draw for traders who want to think outside of the box and build strategies that aren’t entirely based on common technical indicators. However, Tradewell falls short by not offering a way to build and backtest strategies that involve both alternative datasets and technical indicators.

What Type of Trader is Tradewell Best For?

Tradewell is best-suited for traders who want to use backtesting to identify technical indicators or alternative datasets that correlate with a stock’s price. It can be helpful for taking the first steps towards building a complex trading strategy. However, be aware that you’ll need to move from Tradewell to a more traditional backtesting software to backtest your full strategy.

Tradewell is especially suitable if you want to analyze how macroeconomic factors or options trading data correlate with stock prices. This data isn’t supported by other backtesting software and can be difficult to analyze on your own.