How to Perform Backtesting Using Finviz?

5 minutes read

Backtesting using Finviz involves looking at historical data, testing strategies and evaluating performance. To perform backtesting using Finviz, start by selecting the stock or ETF you want to backtest. Then, choose a specific time period and set parameters for your strategy, such as entry and exit points, stop loss levels, and profit targets. Next, run the backtest and analyze the results to see how the strategy performed under different market conditions. This can help you identify patterns, trends, and potential areas for improvement in your trading strategies. By leveraging the tools and data available on Finviz, you can gain valuable insights into the effectiveness of your trading strategies and make more informed decisions in the future.

Best Free Tools for Stock Backtesting in May 2024

1
FinQuota

Rating is 5 out of 5

FinQuota

2
FinViz

Rating is 4.9 out of 5

FinViz

3
TradingView

Rating is 4.9 out of 5

TradingView


What is the purpose of backtesting a trading strategy?

The purpose of backtesting a trading strategy is to evaluate and validate the effectiveness of the strategy by applying it to historical market data. This allows traders to assess the potential profitability and risk level of the strategy before using it in real-time trading. Backtesting also helps traders identify any flaws or limitations in the strategy, optimize its parameters, and make necessary adjustments to improve its performance. Ultimately, the goal of backtesting is to increase the likelihood of success and minimize potential losses in actual trading.


What is the benefit of using Finviz for backtesting?

One of the main benefits of using Finviz for backtesting is that it provides access to a wide range of historical data on stocks, which can be used to simulate trading strategies and analyze their performance over time. This can help traders and investors understand how their strategies would have performed in the past and make better decisions about their future trades. Additionally, Finviz offers a user-friendly interface and tools that make it easy to input and test different trading strategies, making it a valuable resource for both novice and experienced traders.


How to backtest trading signals generated by technical indicators in Finviz?

Finviz does not have a built-in feature for backtesting trading signals generated by technical indicators. However, you can manually backtest these signals by following these steps:

  1. Use the stock screener feature to filter stocks based on certain technical indicators that you want to backtest.
  2. After selecting the stocks that meet your criteria, track their historical price data using a charting software or website.
  3. Look for entry and exit points based on the signals generated by the technical indicators.
  4. Calculate the returns of your trades based on these signals. You can compare these returns with a benchmark index to assess the performance of your strategy.
  5. Keep track of the trades and analyze the results to determine the effectiveness of the technical indicators in generating profitable signals.


Please note that manual backtesting may be time-consuming and may not be as accurate as using a dedicated backtesting software. If you are serious about backtesting trading signals, you may consider using a more advanced trading platform or software that offers backtesting capabilities.


How to analyze backtested results for statistical significance on Finviz?

To analyze backtested results for statistical significance on Finviz, you can follow these steps:

  1. Start by selecting the strategy you want to analyze from the "Backtests" tab on the Finviz website.
  2. Once you have selected the strategy, scroll down to view the backtested results including annual returns, maximum drawdown, and other relevant metrics.
  3. Look for the statistical significance of the backtested results. This can be indicated by a high Sharpe Ratio, low maximum drawdown, and consistent positive returns over time.
  4. Compare the backtested results to a benchmark index or another relevant metric to determine if the strategy outperformed the market or other strategies.
  5. Consider the risk-adjusted returns of the strategy, such as the Sortino Ratio and Calmar Ratio, to understand how well the strategy performed relative to the amount of risk taken.
  6. Consult additional statistical tools and analysis to further evaluate the significance of the backtested results, such as regression analysis, correlation analysis, and hypothesis testing.


By following these steps and using the available tools on Finviz, you can analyze the statistical significance of backtested results and make more informed decisions about the potential effectiveness of a trading strategy.

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