DocsBacktesting
Reading Results
At a Glance
Payoff
2.56x
Avg win / Avg loss
Profit Factor
1.87
Gross P / Gross L
Sharpe Ratio
1.24
Risk-adjusted
Win Rate
42.3%
68 / 161 trades
Expectancy
+0.42%
Per trade
Max Drawdown
-18.4%
Peak to trough
Total Return: +112.4%161 trades · 1,095 days
Drawdown
-18.4%depth
Duration42 bars
Recovery2.1x
Regimes
Volatility
Trend
After a backtest completes, the results panel shows three main sections: the equity curve, performance metrics, and the trade list.
Equity Curve
The equity curve shows your portfolio value over time. A good curve trends upward without large drops. Key things to look for:
- Smooth growth — Steady upward movement is better than spiky gains
- Drawdowns — Large dips indicate risky periods
- Flat periods — Long stretches with no change suggest the strategy is inactive
Key Metrics
| Metric | What It Means | Good Benchmark |
|---|---|---|
| Total Return | Net profit as a percentage of starting capital | Varies by timeframe |
| Win Rate | Percentage of profitable trades | 40-60% is typical |
| Profit Factor | Gross profit divided by gross loss | Above 1.5 |
| Sharpe Ratio | Risk-adjusted return | Above 1.0 |
| Max Drawdown | Largest peak-to-trough decline | Below 20% |
| Calmar Ratio | Annual return divided by max drawdown | Above 1.0 |
| Trade Count | Total number of completed trades | Enough for significance |
Reading Trade Lists
Each trade shows:
- Entry and exit dates and prices
- Direction — long or short
- P&L — profit or loss for that trade
- Duration — how long the position was held
- Signal — what triggered the entry
Warning Signs
Watch for these red flags that suggest overfitting or unreliable results:
- Very few trades (under 30) — not statistically significant
- Extremely high win rate (above 90%) — likely overfitted
- One or two trades account for most of the profit — not repeatable
- Max drawdown is close to total return — strategy is fragile
What Comes Next
A single backtest is just a starting point. To build confidence:
- Change the date range — does it still work on different periods?
- Try different symbols — does the idea generalize?
- Run optimization — are the parameters in a stable region?
- Run Walk-Forward Analysis — does it hold up out of sample?
Next Steps
- Comparing Runs — Side-by-side backtest comparison
- Performance Metrics — Technical details on each metric
- Optimization — Searching for robust parameters
resultsequity curvemetricstradesdrawdownsharpewin rate