Strategy Backtest

Related commands

How it works

What the Backtest Measures

The strategy buys when RSI drops below a low threshold (suggesting oversold conditions) and sells when RSI rises above a high threshold (suggesting overbought). This is compared against a simple buy-and-hold strategy over the same period.

Key Backtest Metrics

Total return: the absolute gain/loss of the strategy. Max drawdown: the largest peak-to-trough decline, measuring downside risk. Sharpe ratio: return per unit of risk. The equity curve chart shows how portfolio value evolved over time.

Survivorship Bias Warning

Backtest results only use stocks that are currently in the database and do not account for delisted companies, dividends, or transaction costs. Real-world performance will differ. Use backtesting as a hypothesis test, not a performance guarantee.

Frequently Asked Questions

What strategy does the backtest use?

The backtest compares a rule-based RSI/MACD trading strategy against a buy-and-hold benchmark. It reports total return, maximum drawdown, Sharpe ratio, and an equity curve.

Is past backtest performance predictive of future returns?

No. Backtesting shows how a strategy would have performed historically, but past performance does not guarantee future results. Beware of overfitting — a strategy that looks great in backtesting may fail in live trading.

What is Talos?

Talos is a natural-language market intelligence terminal. You type commands like 'Analyze NVDA' or 'Optimize AAPL MSFT' and Talos runs quantitative and AI-powered analysis instantly.

Is Talos free to use?

Talos is free to access. Simply visit https://stochastics.vercel.app/ and start typing commands in the terminal.