Run Your First Backtest

Configure and run a backtest from scratch, read the results, and understand what the key metrics are telling you.

Backtesting simulates how a strategy would have performed over a historical period. It's your primary validation tool before committing capital. BitPredict's backtest engine models slippage, fees, leverage, and position sizing — giving you a realistic picture rather than idealised results.

Navigate to Backtesting

Click Backtesting in the left sidebar. You can also arrive here directly from a Strategy Detail page by clicking "Run Backtest".

Select your strategy

Use the strategy dropdown to pick the strategy you want to test. If you've starred strategies, they appear at the top of the list.

Set the date range

Choose a start and end date. Use at least 1 year of history to get a statistically meaningful sample. For strategies with low trade frequency (fewer than 5 trades per month), use 2–3 years.

Set your starting balance

$10,000 is a sensible default for evaluation. The absolute balance doesn't affect percentage-based metrics like return % or Sharpe, but it does affect absolute P&L figures and minimum position sizes.

Set leverage

Start at 1× (no leverage). Once you understand the strategy's behaviour, you can experiment with higher leverage — but understand that leverage amplifies both gains and losses proportionally, and drawdowns become harder to recover from.

Configure risk management (optional for first run)

Stop Loss — a fixed percentage or ATR-based level at which positions are automatically closed at a loss
Take Profit — a target level at which positions are closed at a gain
Trailing Stop — moves with the position, locking in gains as price moves in your favour

Leave these at defaults for your first run.

Click Run Backtest

This costs 1 credit ($0.10). The job is submitted and typically completes in a few seconds to a minute depending on date range and strategy complexity.

Read the results

Total Return % — how much the starting balance grew
CAGR — annualised return
Sharpe Ratio — above 1.0 is the minimum bar, above 2.0 is strong
Max Drawdown — largest peak-to-trough loss, what you'd actually experience in live trading
Win Rate — % of profitable trades
Profit Factor — gross profit divided by gross loss, above 1.5 is healthy
Trade Count — confirm it's statistically significant (aim for 50+ trades minimum)

Never trust a backtest with fewer than 50 trades. Results from small trade samples are dominated by randomness. If your backtest produces 15 trades over 1 year, extend the date range to 3+ years before drawing conclusions.

High return % with low Sharpe (below 1.0) usually means the strategy took outsized risks to achieve those returns. A 200% return with a Sharpe of 0.6 is less attractive than an 80% return with a Sharpe of 2.1.

What's Next

BacktestingIntermediate

Run an Optimization JobSet up a parameter optimization job, define constraints, interpret trial results, and avoid the overfitting trap.

8 min read

ExecutionBeginner

Set Up a Virtual AccountCreate a paper trading account, assign a strategy, and monitor simulated P&L in real time.

4 min read