32 posts tagged with "backtesting"

A backtest gives you one number: 84% profit, 14% max drawdown, Sharpe of 1.62. One equity curve. One drawdown figure. But the order in which your trades happened to occur was just one of thousands of possible sequences — and most of those alternate sequences would have produced a different equity curve, sometimes dramatically different. Monte Carlo simulation runs the trades through thousands of randomized variations and shows you the full distribution of outcomes: the worst 5%, the median, the best 5%. The single backtest becomes a confidence band, and the question shifts from "how did it do?" to "how robust is it?"

A strategy that returns 84% over two years on paper means nothing if you can't say what range of outcomes you might actually experience when you run it live. The single number is a starting point — what comes next is rigorous backtesting against years of OHLCV data, multi-pair stress tests, and risk-adjusted metrics like Sharpe and Sortino. VolatiCloud runs that pipeline on Freqtrade's production-tested engine, returns results in seconds to minutes, and surfaces every metric you need to decide whether the strategy survives contact with reality.