♟️Backtesting Strategies

Backtesting is a method used by traders and investors to test how a particular trading strategy would have performed in the past.

By applying the strategy to historical data, traders can gain insights into its potential profitability, risk, and overall performance during different narratives, market phases, and so on.

Apescreener users can test their own strategies using our Backtesting Strategies module. It’s a powerful tool that helps you simulate, analyze and refine your ideas with ease.

Library

First, you need to select one of the tokens added by users of the previous version of the Backtesting Strategies module. These tokens are located in the Library section on the left side.

Notice! The available Library has historical information for existing tokens until July 10. Later, backtesting will be connected to real-time fetching of onchain history.

Profile

Select between Moderate/Conservative/Degen profiles to have a starting point.

Each of these profiles has its own settings for position derisking (denoted as “x”, where 2x = 200% and so on), take profit size (denoted as %), volatility tolerance and a feeling selector (uncertain, bullish, extreme bullish).

Start Date / End Date

Here we can select the start and end of our strategy simulation.

Please note that you cannot select a start date earlier than the launch of the backtested tokens.

Derisk parameters

Feeling

This parameter acts as a “basic mode”, and it is a predefined multiplier that is applied on top of the investor profile parameters. Setting this value overrides the rest of the parameters.

Uncertain will sets the safest parameters, in which the position is derisked earlier. Bullish and Extremely Bullish sets the derisk later.

Min. Derisk

By setting "min.derisk" value we select the minimum multiplier of a position in which derisking will be triggered.

For example, with a value of 2, derisking will be triggered at a minimum of 2X (or 200%) from the purchase price, 3 — at 3X, and so on.

Take Profit

This parameter indicates how much of the profit of a position will be taken on a derisking event. 0% being that the principal is recovered, and all the profits are still in the position. And 100% means that the complete position is closed.

For example, if you invest $100 and the position does 2x, these are the scenarios depending on this parameter:

Trailed Derisk

This parameter helps avoid premature take profits but needs proper configuration, considering the asset’s volatility, LP ratios, MC, and other factors.

If the price continues to rise after passing the derisking zone, the take profit will only trigger when the difference between the highest and current price exceeds the tolerance. For example, with a volatility tolerance of 20%, if a token has reached a price of $1, take profit triggers when the price difference is $0.8. (20% deviation from $1).

Run Backtest

After selecting all the settings and parameters, click "Run Backtest" to run the strategy.

Backtesting Results

After initiating the backtesting, the user is presented with two charts comparing the derisking strategy with a conventional long-term strategy (hodl).

Performance

This parameter represents the difference in PnL with a conventional long-term strategy. If the derisking strategy is more successful after the correct selection of parameters, the performance value will be positive and vice versa.