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Date

January 24th, 2026

Category

Article, Backtesting, Education

Written by

Daniel Griffiths

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Hello Traders!

I hope you have had a great week. 

I haven’t really managed to get much backtesting done and therefore the stats haven’t changed much but I will update you since next week I am going back to live trading.

Since I didn’t get much testing done, I thought I’d do something different this week with more of an educational stance than my usual performance overview. 

(Tools I have used this week are mentioned at the bottom of this blog – including discounts!)

 

Backtesting Progression

Here’s the stats:

  • 136 total trades
  • 41.91% strike rate
  • 110.1% return

I tested 2 days and only had 2 trades which were both losses. 

AsofJan2026no3

Results measures in R (R = % gained)

 

What is Backtesting?

Since most of you are likely not full time traders / just getting an idea for the game you will likely not understand what I mean when these words are spoken. 

Put simply; backtesting is the act of using bar replay with software (such as TradingView or FXReplay) so that we can play price back in time to hide what it’s going to do. 

Initially, this sounds silly. Why would I hide the price when I already know what it’s going to do? 

The answer to that is we don’t want to start on recent price action (i.e. the last 3 months), we want to focus on much larger timeframes such as 2 years ago. 

However, you can still “cheat” and have a cheeky look at what price will do but you are only cheating yourself and corrupting how your strategy will perform.

Sure, it will look great on paper, but good luck trading that live when you can’t cheat…

 

Why is Backtesting Important?

Backtesting is important because it lets you gather up data that can help you:

  • Find your edge/define it better
  • See where & when your strategy performs best (could be time of day/session/month)
  • Overall performance of your strategy (biggest losing streak expectation, biggest winning streak expectation, P&L, strike rate, profit expectancy, max drawdown, wins, losses, etc)
  • No time limitations, for example you can grab a years worth of data in a few months

Every trader needs to perform backtesting, even once they are consistently profitable.

 

When Should I Backtest & How Much?

It’s really up to you when and how much data you want to gather, but I would definitely recommend not to push yourself so much that you burn out. Backtesting is not a race for gathering as many trades as possible as it’s data for your overall trading plan too. 

Take it slow, digest the information, and keep chipping away at it. 

Hope this helps!

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As promised, here are the tools I have used this week:

Check out the tools page for more info

Thank you for taking the time to read this blog post, it means a lot to me. 

See you next week and happy trading!