analyzing-backtests

name	analyzing-backtests
description	Analyze TradingView strategy backtest results to identify edge quality, overfitting risks, and improvement opportunities.

Backtest Analysis Skill

Triggering Contexts

• User shares TradingView strategy tester results (pasted or file)
• User asks "Is this strategy good?" or "Should I trade this?"
• User wants to compare strategy versions
• After implementing changes from coding-pinescript

Input Handling

Accept Any Format

Users may provide backtest data as:

1. Raw paste from TradingView Performance Summary (messy but parseable)
2. Excel export from TradingView (complete multi-sheet data)
3. CSV trade list (individual trade data)
4. Screenshot (extract visually)

Semantic Parsing Rules

Do NOT rely on exact formatting. Look for these concepts flexibly:

Metric	Variations to Recognize
Net Profit	"Net P&L", "Net P/L", "Total Profit", "Net profit"
Total Trades	"Total trades", "# Trades", "Trade count"
Win Rate	"Percent profitable", "% Profitable", "Win %", "Winning %"
Profit Factor	"PF", "Profit factor"
Max Drawdown	"Max DD", "Maximum drawdown", "Max equity drawdown"
Avg Win	"Avg winning trade", "Average win"
Avg Loss	"Avg losing trade", "Average loss"
Sharpe Ratio	"Sharpe", "Sharpe ratio"
Sortino Ratio	"Sortino", "Sortino ratio"

Value Extraction

After finding a metric name, extract:

• Number with $ or USD → Dollar value
• Number with % → Percentage
• Plain number → Raw value

Fallback

If parsing fails, ask user to confirm key metrics directly.

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Core Analysis Framework

Step 1: Extract & Validate Metrics

Must Have (required for analysis):

• Net Profit ($ and %)
• Total Trades
• Win Rate (%)
• Profit Factor
• Max Drawdown ($ and %)
• Avg Win / Avg Loss

Nice to Have:

• Sharpe Ratio
• Sortino Ratio
• CAGR
• Avg Bars in Trade

Step 2: Sanity Checks

Flag if any of these are true:

• Profit Factor < 0 or > 10 → Parsing error or suspicious
• Win Rate > 100% or < 0% → Parsing error
• Total Trades < 30 → Statistically insignificant
• Max DD > Net Profit → Strategy may not be viable

Step 3: Quality Assessment

Statistical Significance

Trades	Assessment
< 30	❌ Insufficient - results meaningless
30-100	⚠️ Marginal - proceed with caution
100-500	✅ Acceptable - reasonable confidence
> 500	✅ Strong - high confidence

Profit Factor Interpretation

PF	Assessment
< 1.0	❌ Losing strategy
1.0 - 1.2	⚠️ Weak edge - transaction costs may kill it
1.2 - 1.5	✅ Decent edge - tradeable with discipline
1.5 - 2.0	✅ Good edge
> 2.0	⚠️ Excellent OR overfitted - verify out-of-sample

Drawdown Analysis

Max DD vs Net Profit	Assessment
DD < 50% of Profit	✅ Healthy risk/reward
DD = 50-100% of Profit	⚠️ Moderate risk
DD > Net Profit	❌ Risk exceeds reward

Expectancy Check

Expectancy = (Win% × Avg Win) - (Loss% × Avg Loss)

Must be positive. Calculate per-trade expected value.

Step 4: Red Flag Detection

Overfitting Indicators:

• Very high PF (> 3.0) with low trade count (< 100)
• Win rate extremely high (> 80%) for trend strategy
• Tested on single asset only
• No out-of-sample validation mentioned

Survivorship Bias:

• Only tested on assets that "worked"
• No mention of failed variations

Curve Fitting:

• Many optimized parameters
• Strategy logic too complex for trade count

Step 5: Probing Questions

Always ask:

1. "Was this tested on out-of-sample data (walk-forward or separate period)?"
2. "How many parameters were optimized?"
3. "Does this logic make sense fundamentally, or is it just pattern-matched?"

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Output Format

Summary Card

📊 BACKTEST ANALYSIS: [Strategy Name]

Edge Quality: [STRONG/MODERATE/WEAK/NONE]
Trade Count: [N] trades → [Significance assessment]
Profit Factor: [X] → [Interpretation]
Max Drawdown: [X%] → [Risk assessment]
Expectancy: $[X] per trade

⚠️ WARNINGS:
- [List any red flags]

✅ STRENGTHS:
- [List positive aspects]

📋 RECOMMENDATIONS:
1. [Actionable next steps]

Verdict Categories

Verdict	Meaning
✅ TRADEABLE	Passes all checks, reasonable edge
⚠️ NEEDS WORK	Has potential but issues to fix
❌ NOT READY	Fundamental problems, don't trade
🔍 MORE DATA NEEDED	Can't assess without additional info

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Cross-References

• After analysis, if improvements needed → coding-pinescript
• If strategy needs redesign → planning-trading-systems
• Track changes between versions → iterating-strategies