Backtester v2

I am happy to announce the launch of Backtester v2. The new version provides the following enhancements to maximize the value of the Exhaustion Signal Indicator and Scanner:

  • Introduced charts to easily visualize the Win Rate, Avg % Move, and Median % Move over the 10 candles following the signal candle close.
  • Moved from Google Sheets to Looker Studio for an improved user-experience.
  • Increased the number of candles included from 5 to 10 after the signal candle.
  • Expanded data range:
    Daily: 20 years → 30 years
    Weekly: 40 years → 60 years
    Monthly: 60 years → 90 years

Some observations I have noticed while analyzing the data:

  • Weekly bullish level 2 signals have the highest win rate.
  • At an aggregate level, bullish signals perform strongly and bearish signals poorly. This is expected with the amount of data included (285,265 data points) and general trend of the market to move up over the long-term. It is also pronounced by the inclusion of broad market ETFs and weekly & monthly signals.
  • For many tickers, particularly on the daily timeframe, bearish signals do perform strongly. They can also indicate areas of consolidation, where traders should exercise caution when initiating new long positions or consider protecting existing ones.

To get the most out of the Scanner, Indicator, and Backtester, follow this workflow:

  1. Scan for Signals: Use the Scanner to identify potential signals.
  2. Analyze on TradingView: Visualize the signal using the Indicator and complement it with additional technical analysis.
  3. Evaluate Historical Data: Use the Backtester to review historical performance metrics (Win Rate, Avg % Move, and Median % Move) for the ticker after the signal triggered.

Important Note

The data provided by the Backtester is for informational purposes only and should not be considered financial advice. Always:

  • Combine multiple analysis tools and conduct your own research.
  • Understand that past performance does not guarantee future results.

Win Rate = the percentage of signals where price moves favorably within the next 5 bars. Tested on daily/weekly/monthly histories using up to 30/60/90 years of data (as available). The number in parentheses is the signal count (N).

Median % Move = the median of each signal’s best percent change within the 1–5 bar forward window. Each signal’s best outcome is identified independently, then the median is calculated across all signals. Median is shown because it’s more robust than an average when outliers exist. Note: this differs from the backtester dashboard, which shows the median at each individual candle offset (a fixed holding period).

An asterisk (*) indicates multi-timeframe continuity: the same-direction exhaustion signal appears on 2+ timeframes within the defined alignment window.

The content provided by ChartingCycles is for educational and informational purposes only and should not be construed as financial advice. We are not a registered investment advisor (RIA) or broker-dealer. Trading in financial markets involves a high degree of risk and you should not invest money you cannot afford to lose.

Hypothetical Performance Disclosure: Past performance is not indicative of future results. Some results presented may be based on simulated or hypothetical performance, which has inherent limitations and does not represent actual trading.