Configuring a Backtest

The backtest configuration screen lets you define every aspect of how your strategy will be tested against historical data. From selecting a strategy version and setting up account parameters, to choosing a data source and aligning the timezone, each setting shapes the accuracy and relevance of your results.

Strategy Version

The first step in configuring a backtest is selecting which version of your strategy to test. Every time you save changes to a strategy in the Strategy Designer, a new version is created. The backtest configuration screen lets you choose any previously saved version, so you can compare how different iterations of your strategy perform against the same data.

By default, the most recent version is selected. If you want to test an older version — for example, to compare it against your latest changes — simply select it from the version list.

Default Strategy Configuration

Below the version selector, the backtest configuration screen displays the default strategy configuration. This includes all the rule parameters and settings defined in the strategy at the time the selected version was saved. You can review these settings to confirm that the strategy is configured as expected before running the backtest.

The default configuration serves as the baseline for the backtest. The strategy will run exactly as it was designed, using the parameter values set in the Strategy Designer for that version.

Account Settings

The account settings determine the simulated trading environment for the backtest. These parameters control the starting conditions of the account that the strategy will trade against.

Initial Account Balance

Set the starting balance for the simulated account. This represents the total capital available to the strategy at the beginning of the backtest. Choose a balance that reflects how you intend to trade the strategy in practice — results expressed as a percentage return will be relative to this starting value.

Leverage

Set the leverage ratio for the simulated account. Leverage determines how much buying power is available relative to the account balance. A leverage of 1:100, for example, means the strategy can open positions worth up to 100 times the account balance.

Data Source

The data source determines which historical data the backtest engine uses to evaluate your strategy. Arconomy offers two data source options, each suited to different testing scenarios.

Time Series

The Time Series data source lets you define a custom date range for the backtest. You specify a start date and time, and an end date and time. The engine retrieves historical market data for the selected instruments across this entire window and executes your strategy against it.

Time Series is the most common data source for backtesting. Use it when you want to test your strategy against a specific historical period — for example, to see how it would have performed during a particular market event, trend, or period of volatility.

Strategy

The Strategy data source re-runs the backtest using the same data from a previous live execution of the strategy. Rather than selecting a new date range, the engine replays the exact market data that the strategy encountered during its live or paper trading session.

This is useful when you want to compare how a modified strategy version would have performed against the same data that the original version was traded on. It provides a direct apples-to-apples comparison between strategy versions without introducing differences in the underlying data.

Timezone

Timezone alignment ensures that the backtest engine interprets dates and times in the correct context. When you specify a start time of 8:00 AM, the timezone setting determines which 8:00 AM that refers to.

Set the timezone to match the market you are trading. For example, if your strategy targets the New York Stock Exchange, set the timezone to Eastern Time. If you are trading the London session of the Forex market, set it to GMT/UTC. Correct timezone alignment is especially important when you use time-based features like day-of-week filtering or time-of-day windows in Strategy Execution Iterations.

Time Series Window

When using the Time Series data source, you configure the exact window of historical data to test against. The configuration includes:

• Start Date — The first calendar date of the backtest period.
• Start Time — The time of day on the start date when the backtest begins.
• End Date — The last calendar date of the backtest period.
• End Time — The time of day on the end date when the backtest ends.

The combination of date and time gives you precise control over the testing window. You can test a single day, a full quarter, or any period in between. The start and end times are interpreted in the timezone you selected in the previous step.

Next Steps

Once you have set the strategy version, account parameters, data source, and timezone, the next step is to configure how the strategy should be executed across the selected time period. This is covered on the Strategy Execution Iterations page, where you will choose between a single continuous run and iterative execution with day and time filtering.