How to Backtest a Trading Strategy (Getting Started)

[@RJSLIVEE]

My trading has improved dramatically ever since I started backtesting my strategies, I owe my trading career to you guys honestly.

[@smbcapital]

That’s awesome! Glad to hear ;)

[@urosuros2072]

How does one even traee without backtesting 😂😂 You just trade on feelings?

[@redot9914]

I imagine the amount of detail that has to go into a solid backtest, fascinating!

[@mbellafiore19]

like anything else the more you do correctly the better you get

[@jamesslattery2637]

I was thinking about doing a follow-up and adding to it. I wanted a backtest that would show most of the code and still have a result. However, think it would be cool to iterate and add. The problem is showing a full strategy would require a lot of code and hard to break down in a video.

[@redot9914]

@@jamesslattery2637 understandable, you just opened my eyes to how much more complicated it has to be :), Thanks for sharing!!

[@Thetraderchick]

Another great video. One of the best things a trader can do is backtesting everything. You're backtesting strategies and your knowledge, everyone should do it.

[@smbcapital]

Agreed!

[@MrKevin_G]

Awesome! Great to see more coding/algo videos. Please continue to share more of these. I know the discretionary method will always have a place in trading, but as we get more and more technical, and Python/C++ continue to grow in finance, it really helps to see what some of the bigger traders/firms are doing. Cheers!

[@mbellafiore19]

Cheers

[@smbcapital]

Thx! We will add more content like this!

[@shurong4478]

Very clean and logic strategy! Best wishes to him!

[@smbcapital]

Thx!

[@SN-jw7yx]

Brilliant concept for a video!

[@mbellafiore19]

yes excellent idea by Kurt who runs our videos

[@smbcapital]

Hopefully more to come! We asked the traders to get this done bc so many had asked for more detail on back testing

[@TradingWithCody]

You guys are the best!

[@smbcapital]

Thx Cody!

[@itsiktzur]

Appreciate the value you provide greatly,thank you 😊🙏

[@mbellafiore19]

You are welcome

[@smbcapital]

You got it!

[@mikeanis8554]

I do the bulk of my backtesting through the tos on demand feature. Recently started backtesting option strategies here to further extend my knowledge. Im looking forward to Seth's Moneyshow presentation today.

[@CromLine]

Thank you man

[@mbellafiore19]

Love it

[@smbcapital]

Hope you enjoyed Seth’s presentation

[@mikeanis8554]

@@smbcapital I did. You can tell how well he knows his craft and he is such a strong presenter. It was like watching one of his SMB options videos live in real time!

[@Dribbles88]

Yes! Ty for this, been meaning to do this for a while!

[@smbcapital]

Glad it was helpful :)

[@RikimaruNobunaga]

smb your all brilliant thanks guys

[@mbellafiore19]

Working hard and smartly

[@smbcapital]

Thank you 🙏🏼

[@Trumppower]

Very appreciated, thanks SMB Capital.

[@smbcapital]

Any time

[@maureenbennett809]

Great content!😀

[@thelexion]

Great video Yanni! an Interesting variable to add...if VIX is under 20 how does it perform vs over 20

[@mbellafiore19]

good idea Greg

[@dannytetreault]

What code is this? Python? C++? CloudQuant in-house code? How and where did you learn this? Is this part of your education as a new trader with SMB Capital or were you required to learn this at University?

[@sterlingking1243]

I wonder if it would prove better if tweaked for Bella’s VIX rule on breakouts or if there is correlations with VIX 20?? Hmm

[@robertcameron4288]

Been trading for 3 years now, new to coding in strategies, would like to test volume bar pattern strategy that has been working, just to have the figures of accuracy and average gain...what do u suggest for learn to implement that type of back test? thanks

[@yasirali709]

Nice work

[@smbcapital]

Thx!

[@timb4695]

Different people define rvol different ways how do you define rvol for these purposes. Thanks great video

[@harmeetchoudhary1937]

this was so helpful

[@mbellafiore19]

good to hear

[@smbcapital]

Awesome!

[@justtryanother7290]

Thank you for not selling some bullshit course for only $97 lol thank you for the fundamentals you’re the best

[@smbcapital]

haha we give most stuff away for free. We have some courses but those are usually super in depth courses

[@bettermentary9167]

this video was dope

[@smbcapital]

awesome! we plan to do more on the subject

[@insan3.0]

Risk ratio is the most important point. My problem is that my strategy works best whit 1 percent profit and 3 percent stop loss. Shouldn't it the opposite way?

[@urosuros2072]

Unless your winnig over 2/3 of the time fins new strategy , or just go on opposite direction

[@dustinramsey5940]

Line "self.step == 3" is useless.

[@malthus101]

Je$u$ man......... feels so overwhelming! : (

[@danielrioux54]

Nice try. You need to establish a procedure and not getting lost in programming. There are testing procedures on how to test entry by themselves and the same for exit before testing the full strategy, I.e. in and out combined. You need to define your data set: in data and out data, when there is trend, bullish or bearish, or just lateral range market. Need to test on historical data, real time with paper account, real time with real money account but with small size trad before going fully live. If you are not making money at each step, why do think you will make some live ? Finally, you also need to add error management, not only in your program, as a number divided by zero, but also outside, like with order refusal by your broker. From my own experience, it can be costly. Thinking your order is placed and when closing you are in an opposite opened trade or closing a good trade but your order is rejected, this happened to me also. Continue your good or and improve on it.