OctoBot Backtesting: Historical Data, Order Fills, and Result Analysis
Article OctoBot
Summary
This guide explains how to run trading strategies against historical market data in OctoBot. The workflow is to select a profile, download data for the desired pairs and timeframes, run the backtest, and review the report. It describes how starting funds and the selected data file shape the run, and compares exchanges that provide full history with those that offer only recent candles. Limited histories can sharply shorten a test when the file includes both short and long timeframes.
The report includes portfolio and market profitability comparisons, pair charts, open orders, and a filterable trade list. The guide says the engine uses the same strategy code as live trading, but results can differ when live indicators use unfinished candles or strategies depend on non-candle data. Backtesting advances candle by candle, processes order fills from candle data, and handles multiple pairs sequentially. Shorter candle intervals may improve the timing detail of simulated fills, at the cost of slower runs. These results therefore depend on data coverage and the limits of candle-based simulation.
Key ideas
- Backtesting replays a selected strategy on historical candles using the profile’s configuration and starting portfolio.
- Data coverage and timeframe selection determine how much market history a run can evaluate.
- Reports compare strategy profitability with a passive market exposure benchmark and show trades, charts, and portfolio contents.
- Live and simulated results may differ when live strategies use incomplete candles or data unavailable in backtests.
- Order fills are inferred from candle data, so shorter intervals can improve timing detail while slowing the simulation.
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# Backtesting --- title: "Backtesting" description: "Use backtesting to risk-free test and optimize your OctoBot trading strategies. Evaluate your strategy performances on the past days, weeks, months or years." sidebar_position: 3 --- # Backtesting Backtesting is the process testing a system's performances on past data. It uses recorded data of cryptocurrency or stock markets. Learn more about backtesting on <a href="https://www.investopedia.com/terms/b/backtesting.asp" rel="nofollow">investopedia</a>.  In OctoBot, backtesting is a key tool to quickly test and optimize your strategies in a risk-free environment. It enables you to execute your strategy by replaying a past scenario and identify the best settings for your traded markets. ## Backtesting a trading strategy in OctoBot OctoBot includes a backtesting engine that can quickly execute OctoBot trading strategies on historical data. To backtest a strategy, all you need is to: 1. Select the profile to test in profile selector. 2. Use the data collector to download historical data 3. Start a backtesting 4. Analyse results ### Selecting a profile to run in backtesting Go to the profile selector on your OctoBot and select the profile you want to backtest.  #### Trading modes, strategies and evaluators In backtesting, OctoBot uses the most recent version of your selected trading mode, strategies and evaluators as well as their latest configuration. This means that you can select different trading modes & evaluators and restart backtestings without having to restart OctoBot: your next backtesting will take your latest changes. This is useful to quickly try different values of an indicator or any other configuration parameter. Note: when backtesting a strategy, prefer selecting a profile using `paper trading` (use the [trading simulator](simulator)), this way any change you make won't affect your real trading profiles. #### Initial portfolio Similarly to simulated trading, your backtesting initial portfolio is built using the configured `Starting-Portfolio` in your profile. When running a backtesting, make sure you configured your start portfolio with enough funds for your strategy to be able to trade. Don't forget to add some BTC when trading against BTC for example. #### Traded assets settings in backtesting - **Coins**: Selected coins and pairs are ignored as the datafile you will select to run your backtestings will provide the traded pairs - **Reference market**: The selected reference market will change to the common quote of your datafile traded pairs if there is a common quote. Ex: a datafile with BTC/USDT and ETH/USDT will force its reference market to USDT to compute profits from USDT ### Download historical data Using the data collector, available from the backtesting tab, you can download historical data from most crypto exchanges.  You can download data from multiple trading pairs and timeframes at the same time. When using such files, backtesting will run your strategy on each available pair and use the timeframes that are [required in its configuration](../octobot-trading-modes/trading-modes#evaluators-responsabilities). #### Full History exchanges When selecting historical data to download, exchanges are split into 2 categories: `Full History` and `Other`. Here are the differences. **Full history** exchanges allow to download historical data on a selected time range. When doing so, each candle from each timeframe on each symbol will be downloaded for the selected time range. This means that when selecting a time range: - Downloaded history is complete for each candle on the selected time range - The download process can be slow if you selected a large total amount of candles - Full history data files are marked as `Full` in the datafile selector **Warning**: not selecting a time range in Full history exchanges will default to downloading the latest candles only, similarly to **Other** exchanges. **Other** exchanges are exchanges that do not (currently) allow to download historical data. This means that: - Only the most recent candles will be downloaded (usually the last 500 candles) - Selecting short and large timeframes at the same time will result in short backtestings as a backtesting only run on available candles. Ex: a backtesting data file containing the last 500 1 minute candles and the last 500 daily candles will only run on the past 500 candles, which is less than a day. - Data files of this type as displaying their candle count in the datafile selector Overall, it is better to use **Full history** exchanges and select the time range to run your backtesting on. ### Starting a backtesting Once your data file is downloaded, select it and start your backtesting.  Backtestings usually last a few seconds and run in the background, if you want, you can do something else with your OctoBot while a backtesting is running. You are notified once your Backtesting is complete. ### Analysing results You can access your backtesting results from the backtesting tab. Your backtesting report is below the data selector. In this report, there is a summary of your backtesting profits, charts which historical prices, trades and open orders as well as a trades explorer. #### Profitability  This summary shows your profitability running this strategy on this time range. - **Bot profitability** is the profits in % of the reference market your strategy made. - **Market average profitability** the average profitability of your traded markets. It's given as a comparison of the profits you would have made if you were having a permanent 100% exposure to your traded assets, which is extremely risky. It corresponds to equaly splitting your initial funds into those assets and holding them during the whole backtesting time. - **Symbol profitability** is the profitability of each traded pair during backtesting time. - **End portfolio** is the content of your portfolio at the end of the backtesting. - **Starting portfolio** is the content of your portfolio at the start of the backtesting. - **Reference market** is the backtesting reference market (used to compute profitabilities) #### Historical charts  For each traded pair, a historical chart will be displayed. Those charts are interactive and you can select the time frame to be used. On large backtestings, selecting a longer timeframe can be easier to read. Each chart features: - Historical candles and trading volume - Trades made using backtesting - Pending open orders at the end of the backtesting #### Historical trades  Each trade executed during a backtesting is available in the trades explorer where you can easily filter and sort trades to understand how your strategy behaves. ## Going deeper with the Strategy Designer Backtesting as presented on this page is the basic, yet very complete already version of the [Strategy Designer](strategy-designer) available on OctoBot cloud plans.  The strategy designer allows you to do everything the regular backtesting does and alows adds: - Access the **history of your backtesting** runs - Charts to analyse your backtesting runs more efficiently with **historical portfolio value**, PNL and more - The capability to **compare your backtesting results** between runs - Backtesting only profiles to backtest without affecting your current live trading profile - And much more ... If you are already backtesting your strategies and would like to use a more powerful tool, we strongly suggest to have a look at the [Strategy Designer](strategy-designer). ## How backtesting works inside OctoBot ### Backtesting vs live trading When running in backtesting, OctoBot uses the same code to execute a trading strategy as when running it live. This means that results of running a strategy in backtesting and live are identical as long as the input data is also identical. As backtesting runs using complete candles, there might be a difference with live trading as live trading could access incomplete candles to run its indicators (this is the case with real-time evaluators for example). Therefore, in backtesting **realtime evaluators can't run the same way they do in live trading** because in-construction candles are not available. For the same reason, as only candles data are available, backtesting on strategies that run on other data than candles data (following google trends for exmaple) is currently impossible. The only exeption is **ChatGPT historical signals that are made available for free** thanks to OctoBot cloud when running a backtesting using the ChatGPTEvaluator on traded pairs and time frames used by <a href="https://www.octobot.cloud/explore" rel="nofollow">OctoBot cloud strategies</a> that are also using the ChatGPTEvaluator. ### Time management Backtesting works by executing a strategy using past data. Therefore when running a strategy, the backtesting engine simulates the passage of time from the start of your backtesting data to the end. Backtesting will iterate from candles to candles and each iteration will: 1. Update the current candle for each traded pair and timeframe 2. Check if open orders should be filled given the new price data 3. Trigger a evaluation cycle for each trading pair: 1. Push new candle(s) to evaluators 2. Trigger strategies to sum up evaluators outputs 3. Trigger trading modes to create or cancel orders 4. Check if orders should be filled instantly (ex: market orders) ### Multiple traded pairs When selecting a datafile with multiple trading pairs, at each new time tick, associated candles (if any) will be push to evaluators. This happens sequentially, one pair after another. ### Filling orders In backtesting, OctoBot has access to historical candles only. This means that to figure out if an order should be filled, it will have a look at the most recent candle. :::info You can improve the accuracy of orders fills in backtesting by selecting a short time frame in your datafile. It will make your backtesting slower but it might be useful if orders execution must be accurate in time. :::
Shown in full with attribution under the source's licence. Licence: GPL-3.0
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.