Experience of using backtests on Veles

In today's world, algorithmic trading is becoming increasingly popular among traders due to its ability to analyze and make decisions based on objective data. One of the key tools for developing and testing trading strategies is backtesting, a technique for testing the effectiveness of a strategy on historical data. On the Veles platform, which has proven to be one of the most reliable and functional systems for trade automation, backtests play a key role in the process of creating and optimizing trading algorithms.

In this article, we will take a closer look at how to use backtests on the Veles platform, what advantages they provide, as well as analyze possible mistakes and ways to prevent them.

What is backtesting and why is it important?

Backtesting is the process of testing the performance of a trading strategy based on historical data. Its essence is to apply the algorithm or rules of a strategy to already completed market events in order to understand how it could work in real conditions.

The main objectives of backtesting:

1. To assess the potential of a strategy. It is possible to understand whether the strategy has generated profits in the past.

2. Identification of weaknesses. Backtesting helps to identify the strategy's vulnerabilities, such as lack of resilience to volatility.

3. Parameter optimization. Testing different strategy parameters allows you to find the most effective settings.

Veles platform and its backtesting capabilities

Veles is a powerful trading automation tool that provides a wide range of features for working with algorithmic strategies. Among the key features of the backtesting platform are:

1. Historical data support. Veles offers access to an extensive database of historical data on various financial instruments, which allows you to conduct high-quality tests.

2. Flexible parameter customization. Users can set different strategy parameters to test their impact on results.

3. Results visualization. After testing is completed, the platform provides graphs, reports and other analytical data that help to understand the effectiveness of the strategy.

4. Speed of operation. Thanks to an optimized engine, tests on Veles are fast, even when using complex algorithms and large amounts of data.

Benefits of using backtests on Veles

1. High accuracy of analysis

Historical data in Veles includes complete records of prices, trading volumes, and other market parameters. This allows you to create the most realistic testing environment possible.

2. Integration with real markets

The platform supports simulation of order execution, taking into account spreads, delays and other factors, which makes the results of testing closer to reality.

3. User-friendly interface

Intuitive interface allows both beginners and professionals to quickly understand the functionality of backtests.

4. Time saving

Automation of processes and the ability to run several tests simultaneously significantly speed up work.

Steps for backtesting on Veles

1. Strategy Selection

• Before you start backtesting, you need to define a strategy. It can be:

• Indicator strategy (based on MACD, RSI, SMA and others).

• Strategy based on mathematical models.

• Arbitrage or scalping strategies.

2. Setting parameters

After selecting a strategy, it is important to set the key parameters:

• Test period.

• Capital size.

• Commissions, spreads and other costs.

3. Test Run

At this stage, the strategy is applied to historical data. The user can watch the test in real time or wait until it is over and immediately analyze the results.

4. Analyzing the results

Test results include:

• Cumulative profit or loss.

• Risk metrics such as maximum drawdown.

• Number of profitable and losing trades.

• The risk/return ratio.

Typical mistakes when using backtests

Despite the usefulness of backtesting, its results do not always guarantee success in the real market. Here are the main mistakes to avoid:

1. Over-optimization

Overfitting a strategy to historical data (called overfitting) can lead to a loss of effectiveness in real markets.

2. Ignoring market changes

Markets change, and a strategy that was profitable in the past may not be profitable in the future.

3. Incomplete data

Using poor or incomplete data leads to skewed test results.

4. Failure to account for commissions

Many traders forget to account for costs such as commissions*, which makes test results biased.

Veles has no subscription fees or hidden charges. The commission is only 20% and is applied only to the profit the user makes when trading the bot (but no more than 50 USDT per trade).

Case Study: Strategy Backtest on Veles

Let's take a look at an example of testing a simple strategy based on moving averages (SMA).

Conditions:

• Trading is conducted on the FDUSD/USDT market.

• Two moving averages are used: short (10 periods) and long (50 periods).

• Buy signal: crossing of the short SMA up through the long one.

• Sell signal: the short SMA crosses down through the long SMA.

Results:

• Profit: 15% for the year.

• Maximum drawdown: 8%.

• Number of trades: 50.

• Percentage of profitable trades: 60%.

Based on these results, we can conclude that the strategy has a moderate profitability, but requires improvement to reduce risk.

Conclusion

Backtesting is a powerful tool for developing and optimizing trading strategies. The Veles platform provides all the necessary tools to conduct quality tests, analyze results and optimize parameters. However, it is important to remember that success on historical data does not guarantee similar results in the real market. For maximum efficiency, it is recommended to combine backtests with forward testing and regular market monitoring.

Using Veles as a backtesting platform helps traders not only save time, but also improve the quality of their trading strategies, making them more reliable and profitable.