How to View Trading View Indicators Backtest Results

TradingView's pyscript is mainly divided into two parts. This is a backtest tool made using the signal indicator using the "Study" function and the "Strategy" function. Today we are going to learn how to view the results of a strategy that supports the backtest feature in Trading View.

 

Below is a backtesting tool for a break through volatility script. The graph you see is a visualization so that you can compare the difference in performance according to the entered variables. By observing the overall profit graph, it has the advantage of being able to see at a glance which variable has the best return and has a lower and shorter fall.

 

First, let's look at the overview.

 

Below you can see Overview / Performance Summary / Transaction List / Export.

1. Graph

-The white line shows the closing price of Bitcoin as a line graph.

-The blue area shows the rate of return of the strategy. It can be compared intuitively with holding after purchase.

-The orange area at the top shows the MDD (maximum drop). It refers to the highs and lows of the profit curve.

 

2. Data

- Profit and Loss = Shows the cumulative return relative to the initial investment.

- All cleared trades = Shows the number of trades in a specific section.

- Win rate = (total number of winning trades / total number of trades).

- Profit/loss ratio = (all profits / all losses).

- Maximum loss = Shows the range of the lowest point compared to the highest point of the balance (profit curve).

- Average trade = average return of all past trades.

 - Average number of candles in trading = Shows how many candles were traded once on average.

As shown above, you can intuitively see the backtest results with graphs and simple figures!

*** Here, export means extraction, and you can extract trading records and data by clicking it once. This is a feature added by downloading a third-party platform from Google Chrome, not supported by Trading View. This part will be explained in detail in the next section!

 

Let's look at the performance summary next to the overview.

Here you can see more detailed figures than the overview. In the end, you can understand the strategy as a whole by understanding the figures such as whether you achieved an excess return than the buy-and-hold, what the win rate and profit/loss ratio were, and how many times you traded on average!

 

Finally, the transaction list.

Here, if you follow the logic according to the set strategy and trade, it intuitively shows how much profit and loss was achieved at what price and when. It is divided into transaction/type/signal/date/price/contract/revenue/accumulated profit/runup/drawdown.

We'll give you a side note on "run-up" and "drawdown", but run-up shows you what percentage of your highest return during the day after entering the position. Conversely, the drawdown here does not show the highest drop in the yield curve, but rather the percentage of the highest loss during the day after entering the position.

 

【 Quant Pick's TIP 】

1. No matter how good the yield is, the drop should never be more than -20%.

- People who say they can afford a -20% loss in case of actual investment often lose their minds when it is -10%. So, what you can actually handle mentally is about half what you think you can handle.

2. The backtest minus the slippage and the fee is a half backtest.

- Go to the settings of the backtesting tool, set the slippage to 2-3 ticks, and the fee to 0.1% (it depends on the exchange you are using), and then backtest. Although this may seem small, it is a major factor that has a huge impact on long-term returns.

3. Don't fall into the trap of over-optimization.

- In the process of backtesting, it is meaningless to put a 17-day moving average and 5.67% profit margin to create the best return. Because past performance does not fully reflect the future. Do not trust the backtest 100% and hope to get insights by running data simulations based on logic that can be explained with common sense as much as possible.

 

This is how to view backtest results in Trading View!