Week 6: Build Your First Backtest
Now convert your strategy rules into a historical test. You can use a no-code backtesting platform, a spreadsheet for a very simple strategy, Python with Pandas, or a dedicated backtesting framework.
Your backtest should record, for every trade
- Date and time of the signal
- Entry and exit prices, and quantity
- Stop-loss and target
- Gross profit or loss
- Brokerage and estimated charges
- Slippage and the net result
- Reason for exit
Include realistic costs
A strategy that appears marginally profitable before costs may become unprofitable after them. Account for:
- Brokerage
- Securities transaction tax (STT)
- Exchange and regulatory charges
- GST and stamp duty where applicable
- Bid-ask spread and slippage
Week 6 outcome
You should have a trade-by-trade backtest rather than only a final profit figure.
This lesson is for educational purposes only. It is not investment advice, a recommendation or an assurance of returns. Trading and derivatives involve substantial risk, and backtested or paper-trading results do not guarantee future performance.
