Test Your Strategy
Backtest your trading strategies on historical data. Review performance metrics and refine before going live.
Why Backtesting Matters
Realistic Costs
Incorporates commissions, slippage, and market impact to give more realistic results.
Historical Market Data
Uses complete historical data, including companies that failed and corporate actions.
Advanced Methods
Supports walk-forward analysis and Monte Carlo testing, commonly used in professional research.
How Backtesting Works
1
Historical Data Testing
Run your strategy on 3–5 years of market data to see how it might have behaved across different conditions.
2
Trading Cost Simulation
Factor in commissions, slippage, and market impact to approximate realistic execution.
3
Performance Review
Review metrics such as total return, win rate, maximum drawdown, and risk-adjusted outcomes.
Common Performance Metrics
Total Returns
Shows overall gains or losses during the test period, including costs.
Win Rate
The percentage of trades that closed profitably. Provides insight into consistency.
Maximum Drawdown
The largest peak-to-trough decline. Highlights potential downside risk.
Sharpe Ratio
A measure comparing returns to volatility. Often used to evaluate risk-adjusted results.
Interpreting Results
1
Identify Strengths
Look for strategies that perform reasonably across different years and market conditions.
2
Spot Red Flags
Be cautious of strategies that only perform in one type of market, have very large drawdowns, or rely on very few trades.
3
Condition Testing
Evaluate how your strategy behaves in bull, bear, and sideways markets to understand potential robustness.
What Makes eZorro Different
Complete Data
Includes all stocks from the testing period, even those that no longer exist, to avoid survivorship bias.
Realistic Costs
Incorporates commissions, slippage, and market impact to approximate live trading conditions.
No Future Peeking
Only uses information available at the time of each trade in the test. Prevents look-ahead bias.
Corporate Actions
Accounts for stock splits, dividends, mergers, and spin-offs automatically.
Get Started
Backtest Your Strategy
Test your trading strategies on historical data with professional-grade backtesting. Gain insights before committing real capital.
Next Steps
Strategy Construction
Learn how to build strategies that can be evaluated through backtesting.
Technical Indicators
Explore indicators commonly used in backtested strategies.
Risk Management
Understand how to apply risk controls that affect backtest outcomes.
Beginner Strategies
Explore sample strategies with backtesting results and metrics.
⚠️ Backtesting results are hypothetical and based on historical data. They do not guarantee future performance. Trading involves risk, including the possible loss of capital.