Backtesting lets you evaluate how your strategy would have performed in past market conditions - helping you gain confidence before going live.
We do this by simulating trades (hits) using historical market data, based on the exact entry and exit conditions you've set.
Example: How It Works
Let’s say you’re testing this strategy:
Entry condition: When the 1-hour bar opens below the 20-MA and closes above the 20-MA
Exit condition: When profit reaches 0.25%
Capitalise.ai scans the past 90 days and finds every instance where these conditions were met.
In this case, the strategy produced 20 hits - each representing a full entry and exit cycle.
Each hit can be matched with a corresponding point on the historical price chart. For example:
On July 29, 2020, at 15:00 EST, a bullish candle opened below the 20-MA and closed above it.
This met the entry condition and became Hit #18 of the strategy.
Why It Matters
Backtesting helps you validate a strategy’s logic and historical performance. While past performance is not a guarantee of future results, it gives you a valuable sense of how your strategy behaves in real market conditions.
We’ve made backtesting intuitive, accurate, and easy—so you can trade with confidence.
Click on the following links to continue learning how to run a backtest and how to analyze a backtest.
Note: All screenshots and examples are for technical demonstration purposes only. They should not be considered as recommendations for any specific trading strategy, nor do they constitute any form of advice. Please click here for further explanation