TD Ameritrade's Backtesting Tool Lets Investors Relive, Retest Their Trades

February 16, 2018 — 1:40 PM EST

Reliving the past is not an option, but retesting trades is thanks to TD Ameritrade's backtesting tool geared toward more active traders. Called thinkorswim OnDemand, the stock backtesting tool enables investors to retest their previous best trading days to evaluate their skills and potentially apply the lessons to the future.

"The tool has recorded virtually each market tick, so you can backtest stock, forex, futures – you can even backtest options trading strategies – all the way back to December 2009," wrote the Omaha, Nebraska-based online brokerage in a recent blog post.

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According to TD Ameritrade Holding Corporation (AMTD), the tool can be used for both short-term and long-term investors who want to evaluate their skills and improve upon them. For starters, TD Ameritrade said that short-term, day trading investors can use the tool to see how their trading strategies would have done during market-moving times such as when the Federal Reserve changed interest rates or a company reported earnings. For longer-term investors, the tool can show them how simulated portfolios would have done when the market was bullish, bearish or neutral, as well as how macroeconomic news would affect profits and losses.

The backtesting tool is one example of TD Ameritrade's efforts to arm its customers with more abilities to make money from the stock market. While stocks have been setting new highs for two years in a row, volatility has reappeared, making it tougher for investors to generate profits.

In late January, aiming to empower its growing base of Asian investors and to be an early mover in the online brokerage world with a new service, TD Ameritrade announced that it is the first U.S. retail broker to roll out 24-hour trading in the U.S. In a press release, it said that investors can now access the equity markets throughout the night, with qualified TD Ameritrade clients now able to buy or sell certain exchange-traded funds from 8:00 p.m. ET Sunday to 8:00 p.m. ET Friday.

According to the brokerage firm, as it stands now, there is a gap between when investors make investment decisions and when they can put them into action. TD Ameritrade said close to 70% of clients that use the firm's research and education resources do so outside of regular market hours and have to wait until the next day to make a transaction based on their research. Meanwhile, Asia-based investors that want into the U.S. markets have to trade during U.S. market hours, regardless of their own time zone. In February, TD Ameritrade launched trading on Twitter, with customers able to make trades while on the microblogging platform.