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In this tutorial, I will show you how to use the backtest feature in TradingView and provide the benefits and downsides of this platform based on my personal experience.
This powerful tool allows traders to test the effectiveness of their trading strategies, whether they have developed them.
Key takeout
- TradingView’s backtesting capabilities allow traders to quickly test their wide range of trading strategies in a vast collection of global trading markets.
- The platform offers a variety of strategies created by community members and the ability to create their own members.
- TradingView’s backtesting platform has limitations, but there are solutions as well.
Benefits of backtesting in TradingView
Some of the benefits of using TradingView’s backtesting platform include:
- Fast results: The backtest system is fast and allows you to see results immediately. This allows you to quickly iterate and adjust your strategy accordingly.
- Community Script: You can use other trader strategies that are available in the community. This saves you the time and effort to develop your own strategy.
- Historical data: TradingView Deep backtest Ability to provide all the historical data needed to perform a thorough backtest.
- easy to use: The backtesting feature is simple and requires no complicated setup.
- Access to many global markets: TradingView gives traders access to a wide range of markets from around the world. This could be the largest collection of data feeds published in the world.
- Browser-based: Available on almost any operating system.
- Create your own strategy: Quickly create and test your strategy with pine scripts.
Now that you know a little about the platform, here’s how to get started:
How to access strategy testers in TradingView
First, make sure you are logged in to your paid account.
To access the backtest function, click first Strategy Tester The tab at the bottom of the screen.
From there, click Load your strategy button.
This is a strategy you created or developed by community members within TradingView.
To find a strategy, search by name or see the available community scripts.
Use the menu on the left side of the window to see other types of strategies.
Select Personal Review the strategy you created.
Yes, there are plenty of strategies available, and that can be a bit overwhelming.
So start with something that understands and tests all the relevant strategies.
For example, when searching for trading strategies for Bollinger Bands, this is what you’ll see.
The number on the right of each strategy shows how many people are currently using it.
Usually the most popular ones are at the top.
But not always.
So, scroll through the strategy and see all of them.
Click on the strategy and TradingView will add it to the chart, run a backtest on the current market/timeframe, and tell us your results.
You can check the transactions you have taken and get a performance summary report under the chart.
Pretty smooth!
How to run backtests in other markets and time frames
Once you have chosen a backtesting strategy, it is very easy to run the tests in the market and time frames available in TradingView.
To run the test in a different time frame, simply click on one of the available time frames at the top of the current chart.
You can also set your own custom time frame by clicking the down arrow and selecting “Add Custom Interval.”
The results of the backtest for that time frame are displayed at the bottom of the screen, just like the first backtest.
The results are displayed almost instantly, making this a very efficient way to backtest.
To test your strategy in other markets, click the watchlist icon in the top right corner, then click the market you want to backtest.
You can also search for new markets to test by clicking on the current market ticker in the top left corner of the screen.
Again, as soon as you select a market, the backtest results will appear in the bottom panel.
Delete trading strategy
To remove a strategy from a chart, Object Tree On the right side of the screen, click the icon, then click erase Icon next to trading strategy.
Once you have deleted the strategy, you can either delete the new strategy or use the CartingView as just a charting platform.
Evaluating backtest results
Now it’s important to talk about what a “good” backtest result is.
Many new traders either think they need to get great results on their first attempt, or they think the backtest is a failure.
That’s not how it works.
In reality, it’s best to look for the strategy you have Potential.
So here are some things to look for:
- Strategies are close to break-even: Strategies can be optimized
- There are huge winners that are slowly taken away by small losers: the number of losers can probably be reduced
- Conversely, there are consistent small winners, but there are some big losers: the size of the lost deal can be reduced
- Strategies that work well in some markets, but not others: trade only in markets where it works well
But that’s just the tip of the iceberg.
To get a complete guide on how to determine and potentially improve backtest results, read my article on good backtest results.
Smart ways to choose your trading strategy
When it comes to choosing a strategy to test, there are several ways to approach it.
First, you can view it Available strategies As mentioned above, it is free to use.
Sort strategies by popularity and backtest each.
If you’re not sure where to start, this is a decent method.
But you will soon learn that most of the free strategies don’t work.
Yes, you generally get what you pay.
And there are so many strategies out there, and there are strategies that are forever necessary to test them all.
So, if you get tired of looking for random butt strategies, it’s time to be smarter.
A better way to approach this process is to start by asking yourself what type of strategy you are looking for.
- Do you like trending strategies?
- Do you want to trade RSI strategies?
- Want to day trading?
Next, look at all the strategies that fall within the selected category.
Search for keywords related to the type of strategy you want to find.
Backtest them and see how they work.
Again, the chances that they may not go well are very good.
But they may be.
The worst-case scenario gives you a good starting point and idea for your own strategy.
This is a major advantage of the TradingView community.
How to create your own strategy
Many of TradingView’s trading strategies are free and open source, so you can quickly build your own strategies using them.
Find the free strategy you want to build first.
Then click to create your own Pine Script project Pine Editor The tab at the bottom of the screen.
Copy and paste your existing strategy into the PineScript tab to begin the adjustment.
Save the strategy and then run the backtest.
Yes, you need to Learn Pine Script.
However, most programming tutorials are extremely boring.
If you know what you want and have a starting template to get there, learning will be much more fun and usually the results will be displayed faster.
Focus on the current script part you want to change and go from there.
To sign up for TradingView, click here.
Historical Data Availability Considerations
When using the backtest feature in TradingView, it is important to understand the amount of historical data being tested in each test.
Data availability varies by market and time frame.
Higher time frame charts, such as daily, weekly, and monthly charts, usually have enough data to perform a valid test.
However, in low time frames such as 4-hour charts, historical data is very limited.
You may only have access to two or three years of data, but this is not enough to do a thorough backtest.
Be sure to read more about the number of transactions you need to be confident in your trading strategy.
If a particular market requires an entire dataset, Deep backtest function. This is only available on high-tier paid plans.
This is a major drawback of the platform.
If you don’t want to pay a higher TradingView monthly fee, there are other solutions, such as the Naked Market. This usually provides much more historical data than TradingView or free continuous data updates.
Limitations and drawbacks
Below are some limitations on the cordingView to recognize:
- The backtest feature is only available on TradingView’s paid plans.
- TradingView does not have sufficient historical transaction data for lower tier planning. It could be enough data on higher time frames, such as daily charts. If you go to a low time frame like a 4-hour or 1-hour chart, you may only be able to get two or three years of data, but this is not enough. You have to pay more Deep backtest To get more comprehensive data.
- There is no way to upload your own historical data.
- You can backtest only one market, strategy, and time frame at a time. Currently there is no way to backtest multiple variables at the same time.
- There are no offline tests.
- Report metrics are decent, but still limited. See more detailed backtest statistics.
- TradingView’s backtesting functionality is useful, but it is not a replacement for live trading. Still, you need to be careful and don’t rely solely on the outcome. Make sure to implement forward tests before putting real money in your strategy.
TradingView’s backtesting capabilities have limitations and costs, but they can be a valuable tool for quickly testing your trading strategy.
Conclusion
Based on experience with the backtest feature in TradingView, it’s not for everyone.
If you can do two things, that really makes sense.
- Pine script code
- Subscribe to our paid plans Deep backtest ability
One of the major benefits of the backtest feature is that it allows you to test the trading strategies and scripts created by the community.
Unfortunately, most of them are useless. It’s no different to any other platform.
However, they can be a great starting point for giving you your own strategy ideas.
If you want to backtest manually, TradingView also has a Burreplay feature that eliminates the need to learn the pine script.
So, at the end of the day, backtesting in TradingView makes sense for some traders, but that’s not for everyone.
That said, I strongly feel that TradingView is like that. The best chart Platform It is available and highly recommended for that reason.
