Get Tability: OKRs that don't suck | Learn more →

3 strategies and tactics for Backtesting

What is Backtesting strategy?

Team success often hinges on the ability to develop and implement effective strategies and tactics. It's a bit like playing chess, except that you have more than 1 player on each side.

Finding the right Backtesting strategy can be daunting, especially when you're busy working on your day-to-day tasks. This is why we've curated a list of examples for your inspiration.

You can copy these examples into your preferred app, or alternatively, use Tability to stay accountable.

How to write your own Backtesting strategy with AI

While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI generator below or our more complete goal-setting system to generate your own strategies.

Backtesting strategy examples

You'll find below a list of Backtesting tactics. We also included action items for each template to make it more practical and useful.

Strategies and tactics for developing a Scalping Strategy for TradingView

  • ⛳️ Strategy 1: Define Entry and Exit Conditions

    • Identify key indicators such as moving averages, RSI, and MACD for entry signals
    • Set buy conditions where moving average (e.g., 5 EMA) crosses above another (e.g., 13 EMA)
    • Define a sell condition where the 5 EMA crosses below the 13 EMA
    • Use RSI to filter entries; consider buys only if RSI is above 30 and sells if below 70
    • Incorporate MACD crossovers to confirm buy or sell signals
    • Set stop-loss at recent swing low for buys or swing high for sells
    • Set profit targets at three times the stop-loss distance
    • Test the strategy's historical performance using TradingView's backtesting tool to ensure the accuracy range
    • Set alerts in TradingView to notify when buy or sell signals are triggered
    • Regularly review and adjust conditions based on market trends and historical performance

  • ⛳️ Strategy 2: Utilise Multi-Timeframe Analysis

    • Identify a primary timeframe for execution, such as 5 minutes for scalping
    • Use one higher timeframe, such as 15 minutes, to confirm the primary trend direction
    • Ensure signals on the 5-minute chart are aligned with trends on the 15-minute chart
    • Set alerts when signals on both timeframes align
    • Track the larger timeframe trend with a long EMA like the 50 EMA
    • Enter trades only when the larger timeframe supports the trade direction
    • Adjust stop-loss and target parameters according to combined timeframe volatility
    • Use TradingView's split-screen feature for simultaneous multiple timeframe analysis
    • Backtest the combined timeframe strategy on historical data
    • Regularly update the analysis to adapt to new market conditions

  • ⛳️ Strategy 3: Implement Risk Management Techniques

    • Set position size to risk only a small percentage of the trading account per trade
    • Ensure risk-reward ratio is incorporated by setting the take profit levels thrice the distance of stop-loss
    • Implement a trailing stop strategy to lock in profits as a trade moves in your favor
    • Regularly review risk management rules to confirm they are being met in every trade
    • Consider spreading risk across several instruments rather than focusing on one
    • Use a trading journal to document every trade to improve strategy over time
    • Plan a maximum of trades per day to prevent overtrading and emotional decision making
    • Periodically review trading outcomes and adjust risk management if outcomes deviate from goals
    • Backtest risk management rules in TradingView to ensure robustness
    • Include news alerts to avoid trading during high volatility times
scalpingbacktestingtraderrisk-analystrisk-management-teamtrading-strategy-team
Implement these strategies

Strategies and tactics for developing a Profitable Day Trading Strategy

  • ⛳️ Strategy 1: Adopt the EMA Pullback Method

    • Set up 9 EMA and 21 EMA on your trading charts
    • Choose assets that are highly liquid such as major forex pairs or SP500 futures
    • Monitor the 5-minute chart actively during the highest liquidity hours for your chosen market
    • Identify the trend by ensuring the price is above both 9 EMA and 21 EMA for a bullish trend
    • Wait for the price to pull back to the 9 or 21 EMA in the direction of the trend
    • Confirm an entry using volume spikes on breakout candles and bullish candlestick patterns
    • Place a buy stop order above the high of the pullback candle
    • Set a stop loss below the recent swing low or use 1.5x ATR for volatility adjustment
    • Establish initial profit targets at 1:1 risk-reward ratio and adjust as needed
    • Ensure total exposure to risk per trade does not exceed 1% of your account balance

  • ⛳️ Strategy 2: Utilise Effective Risk Management

    • Define your maximum risk tolerance per trade and systematically adhere to it
    • Set a daily maximum loss cap at 2% of your account balance to cease trading if reached
    • Implement position sizing methods to ensure capital preservation
    • Avoid trades during major scheduled news events to manage unexpected volatility
    • Utilise ATR to determine the appropriate market conditions and avoid low volatility trades
    • Confirm that higher timeframe trends align with 5-minute chart setups for consistency
    • Exclude trades in markets deemed to provide choppy or unclear signals
    • Define clear conditions under which you will avoid or limit leveraged trades
    • Backtest risk parameters on historical data and adjust accordingly
    • Evaluate overall performance monthly and recalibrate risk strategies if necessary

  • ⛳️ Strategy 3: Maintain Trading Discipline and Setups

    • Create a predefined trading plan specifying entry, exit, and stop criteria
    • Document every trade in detail for subsequent analysis and learning
    • Restrain from making impulsive decisions and overtrading throughout sessions
    • Monitor psychological aspects such as greed or fear which affect decision making
    • Focus only on high-probability setup opportunities termed as A+ setups
    • Commit to frequent review of strategy effectiveness and adaptability
    • Ingrain a structured routine to aid consistent and disciplined trading practices
    • Use mechanical aids like hotkeys to ensure swift execution during peak moments
    • Engage in strategy optimisation based on observed performance and market shifts
    • Develop coping strategies to manage emotional stress and minimise revenge trading
scalpingtechnical-analysisday-traderrisk-managertrading-teamrisk-management-team
Implement these strategies

Strategies and tactics for developing a Robust Options Trading Methodology

  • ⛳️ Strategy 1: Execute Entry Criteria Precisely

    • Monitor EMA 5 and EMA 9 crossovers on 15-minute charts
    • Confirm crossovers with candle close above both EMAs for bullish signals
    • Verify crossovers below both EMAs for bearish signals before taking a position
    • Buy call options on confirmed bullish EMA crossovers
    • Buy put options on verified bearish EMA crossovers
    • Use RSI to confirm overbought or oversold conditions
    • Implement MACD to confirm momentum direction
    • Incorporate volume analysis to validate strength of move
    • Backtest entry criteria on historical data
    • Refine entry signals based on backtesting results

  • ⛳️ Strategy 2: Implement Disciplined Risk Management

    • Apply a 4% profit target as the primary exit condition
    • Set a stop-loss at 2% below entry to control risk
    • Calculate position size based on risk-to-reward ratio
    • Limit trades to no more than 10 per trading day
    • Evaluate each trade on hitting predefined risk parameters
    • Adjust stop-loss levels based on market volatility
    • Test risk management strategies during backtesting
    • Utilize sizing techniques like Kelly Criterion for optimal sizing
    • Ensure trade frequency aligns with strategy accuracy
    • Document risk management processes and outcomes

  • ⛳️ Strategy 3: Enhance Strategy with Technical Indicators

    • Add RSI to filter out false signals
    • Incorporate MACD to gauge market momentum
    • Analyze volume to confirm trade signals
    • Experiment with Bollinger Bands to assess market volatility
    • Utilize ATR to set dynamic stop-loss levels
    • Regularly optimize indicators using past market data
    • Test additional indicators during periods of market stress
    • Develop a multi-indicator filter system to increase signal quality
    • Backtest strategy with varied indicator combinations
    • Review and update technical indicators quarterly
options-tradingrisk-managementtraderrisk-analysttrading-teamrisk-management-team
Implement these strategies

How to track your Backtesting strategies and tactics

Having a plan is one thing, sticking to it is another.

Don't fall into the set-and-forget trap. It is important to adopt a weekly check-in process to keep your strategy agile – otherwise this is nothing more than a reporting exercise.

A tool like Tability can also help you by combining AI and goal-setting to keep you on track.

More strategies recently published

We have more templates to help you draft your team goals and OKRs.

Planning resources

OKRs are a great way to translate strategies into measurable goals. Here are a list of resources to help you adopt the OKR framework:

Table of contents
Copyright © 2024 Tability