Getting Started
Understanding Your Results
Learn how to read and interpret your backtest results.
After running a backtest, Tradient shows you a comprehensive performance report. Here's what each section means and how to use it.
The Equity Curve
The equity curve is a line chart showing your portfolio value over time. A good strategy shows a steadily rising equity curve with small, controlled dips. Large drops or flat periods indicate potential problems.
Key Metrics to Watch
- Total Return — The overall profit or loss as a percentage of starting capital
- Win Rate — The percentage of trades that were profitable. A 50-60% win rate is common for trend-following strategies
- Profit Factor — Total gross profit divided by total gross loss. Above 1.5 is generally considered good
- Maximum Drawdown — The largest peak-to-trough decline in portfolio value. Lower is better — ideally under 20%
- Sharpe Ratio — Risk-adjusted return. Above 1.0 is decent, above 2.0 is excellent
- Average Trade — The average profit or loss per trade. This should be positive and large enough to cover trading costs
Red Flags
- Drawdown over 30% — Your strategy may be too risky
- Win rate below 30% — Your entry conditions may need refinement
- Profit factor below 1.0 — Your strategy is losing money overall
- Very few trades — The results may not be statistically significant
Focus on the profit factor and maximum drawdown first. These two metrics give you the clearest picture of whether a strategy is viable.