Is Pine Optimizer Right for Me?

Hello traders,

My name is Tim, and I’d like to welcome you to this video tutorial series on trading strategy optimization, using Pine Optimizer.

If you’re not yet familiar with Pine Optimizer, or you’re new to the field of trading strategy optimization, you may be wondering whether this is even something you should be spending your time on.

So, my goal, in this first session, is to introduce you to the core concepts that we’ll be covering in this series.

Let’s start by taking a look at Pine Optimizer itself and see how it fits into the bigger picture.

Pine Optimizer is a software tool that works with the popular TradingView platform …

… enabling traders to tune their trading strategies for optimum performance.

And, by optimum performance, we generally mean the combination of increased profitability and reduced risk.

So, if you’re already an enthusiastic TradingView trader, and especially if you’re frustrated with trading strategies that don’t perform as well as you might expect them to, you’re in a great place to get started with Pine Optimizer. If you’re not yet familiar with TradingView, I’ll include some links, in the description, to help you get started.

Let’s dig a little deeper and look at exactly what you’ll need to know, to get the most out of this video series.

As a starting point, it’ll be to your advantage if you’ve already used TradingView and you’re familiar with it’s charting tools. Thankfully, it’s very intuitive to learn, so even if you don’t have much experience with TradingView charts, it won’t take you long to get up to speed. Simply sign up for a free TradingView account and experiment with a chart of your choice. There are numerous excellent tutorials on YouTube and Udemy, and I’ll leave my own recommendations below.

Another important foundation skill is technical analysis - the ability to read and interpret a price chart and make sensible predictions about what price might do next. Of course, this is a huge topic, dating back to the 1800s, so it won’t surprise you that hundreds of books have been written about it, and the online learning channels are overflowing with helpful tutorials on the topic. You definitely don’t need to be an expert in technical analysis, in order to optimize a trading strategy that was developed by someone else, but if you intend to design your own strategies, a solid grounding in this subject will make your task a lot easier. Again, I’ll leave you my recommendations in the description.

Next up comes backtesting - the process of measuring the performance of a strategy against historic market data.

Experienced traders know that backtesting is an essential element in their long term success. A strategy that has survived rigorous backtesting is far more likely to perform profitably in real-world trading. To trade a strategy that hasn’t been properly tested is like flying a plane that hasn’t been safety checked. You might get lucky and complete your journey without an unpleasant incident, but is it really worth risk?

Thankfully, backtesting with TradingView is a breeze. Simply add a strategy to a chart and TradingView instantly reveals how it performed over the chart period. Measuring the performance of a strategy is the first step toward optimizing it, and TradingView does all the heavy lifting for you.

We’ll be covering the basics of backtesting, using TradingView, in an upcoming video, so stay tuned.

Last on our list of essential skills is Pine Script, but this one comes with a huge caveat. You don’t really need to become an expert in Pine Script in order to take advantage of its impressive capabilities. Let me explain …

In case you’re not familiar with it, Pine Script is TradingView’s proprietary chart programming language. It can be used to create indicators that highlight important patterns on your chart or it can transform a raw trade idea into a strategy. A Pine Script strategy can be backtested against a chart, to see how it would have performed historically and even run against the live market, as a trading bot.

Many people will roll their eyes at the prospect of learning a new programming language (or even their first programming language), but thankfully the TradingView ecosystem offers us quicker and easier alternatives.

If you’re happy to trade ready-made strategies, designed and developed by other traders, the TradingView community offers numerous options to choose from. Some of these are free to use; others require a payment. But, either way, the Pine Script code that implements these strategies is already written, so you only need to copy and paste it onto your chart.

Alternatively, if you’re keen to implement a unique trade idea of your own, you can outsource the development of its Pine Script to a contractor. You’ll find many competent Pine Script coders in the TradingView community, as well as on freelance marketplaces, such as UpWork and Freelancer. To make a success of this approach, you need to be able to precisely describe your trade idea in a way that leaves your coder no room for ambiguity. Once you receive the result, like before, it’s just a case of copy / pasting it onto your TradingView chart.

Of course, the most challenging option is to learn Pine Script yourself and code your own strategy script. Actually, this is not as daunting as it may seem. Pine Script is an easy language to learn, and a simple indicator or strategy script can be created in as little as 8 lines of code. So, it’s entirely feasible to start learning Pine Script today and to successfully implement your first working script before bed time.

If you’re curious about this approach, there are some excellent Pine Script tutorials available on YouTube and elsewhere. Once again, I have linked my own recommendations below.

So, let’s combine all these concepts into a workflow that can be used to design the kind of high-performance trading strategies that we’d all be keen to trade with.

As with most great creations, we start with an idea. In trading, this idea usually comes from many hours spent observing markets and looking for recurring patterns. Hopefully we’ll discover patterns that can be converted into a trading plan with a competitive edge.

If you intend to design your own unique and original trading strategies, this is the step where your knowledge and experience of technical analysis will pay dividends. But, as I mentioned previously, you also have the option to borrow ideas from other traders, such as the numerous YouTube traders who share their own trade ideas as video demos.

Next up comes, strategy design, where you’ll transform your idea in to something more concrete that can actually be traded. Discretionary traders have traditionally used this step to create a formal trading plan - a precise written specification of the rules for executing a trade idea when an opportunity arises.

But, in the world of TradingView, we instead use Pine Script to transform our trade idea into a strategy script. As we already discussed, there are multiple ways to accomplish this, and you are free to choose the one that suits your goals and aligns with your skills.

Once you’ve reached the first version of your strategy script, you’re ready to backtest it and discover how it actually performs. You’ll do this using the TradingView strategy tester. In the next video, I’ll demonstrate this process in practice. If you’re new to TradingView, this will give you a valuable introduction to the tools that we’ll be working with, and if you’re a TradingView veteran, this demo will provide some context for the strategy optimization techniques that we’ll be exploring in the remainder of this series.

It’s important to understand that strategy development is an iterative process. If your strategy doesn’t perform the way you hoped, it could be because your trade idea needs more work …

… or because its implementation is flawed. Either way, you’ll need to revert to one of the earlier steps in the process and make the necessary adjustments, before re-running the backtest.

Like any great creation, a high-performance trading strategy can take time and patience to achieve, so you should be prepared to iterate several times, perhaps many times, before you strike gold.

When you finally see backtest results that confirm the viability of your strategy, it’s time to move on to optimizing it. Optimization is distinct from the strategy prototyping process, because it doesn’t modify the underlying trade idea - it simply tunes the parameters used to execute that idea.

You can think of parameters as the knobs and switches that adjust the fine detail of how your strategy works. Each time you turn one of those knobs, even just a fraction, it makes a difference to how the strategy plays out, which is reflected in the backtest result.

In essence, optimization entails running a new backtest for every unique combination of parameter values supported by your strategy. This is another iterative step, but one that can entail many iterations - sometimes hundreds or even thousands of them, depending on the complexity of your strategy. In other words, optimization can be quick and simple but it also risks becoming a very time-consuming process.

As we’ll see in the upcoming videos, TradingView doesn’t handle this scenario very well. Specifically, it lacks the tooling to efficiently manage strategy optimization, which is why we created Pine Optimizer. Using these two tools together, even the most extensive and complex optimization sequence becomes manageable, and it’s possible to achieve a level of optimization that is unimaginable, when working with TradingView alone.

So, before we wrap up this intro video, let’s take a look at what you’ll need to get started with strategy optimization using Pine Optimizer.

First off, you’ll need a TradingView account.

This can a free account or an account on any of the paid tiers. There are some advantages to using a paid TradingView account, which we’ll cover in a later video, but it’s definitely possible to optimize your trading strategy using a free TradingView account and, in fact, all of the demos in this video series have been created using a free account.

You’ll also need a device to work on …

… and this needs to have a screen width of at least 1280px, so it basically means a desktop computer, a laptop or a tablet, but not a phone. The reason for this limitation is that, although TradingView runs on mobile devices of all sizes, it currently doesn’t support strategy testing on small screens.

But, any device from a tablet upwards should work just fine …

… and all the major platforms are supported.

And the last thing you’ll need is a web browser, which you’ll use to run both TradingView and Pine Optimizer.

To be specific here, you need to be using a Chromium-based browser, which means it could be any of the popular web browsers that are based on the Chromium framework. Some commonplace examples include Google Chrome and Microsoft Edge, as well as several others, so there’s a good chance that you’re already using a suitable browser.

And that’s it. As you can see, these requirements are quite easy to meet, so it’s not difficult to make the move into optimizing your trading strategies for bigger profits and lower trading risk.

If this sounds like something that might add value to your trading, I hope you’ll join me in the next video, where we’ll review how backtesting works in the TradingView strategy tester.

In the meantime, thanks for watching.