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Stress-Test a Trading Idea
What this helps you do
This walkthrough helps you take a trading idea from “I wonder if this works” to a clear, testable set of rules you can validate inside the Strategy Builder. You’ll build an entry, define how you exit, and then sanity-check the results using the Strategy Stats panel.
It matters because most trading ideas sound good in your head, and a rules-based backtest forces the idea to be specific, consistent, and measurable. It also helps you catch the classic mistakes early, like exits that never trigger, rules that barely trade, or strategies that look amazing only because they got lucky once.
If you’re brand new to the Strategy Builder, this walkthrough assumes you have a basic sense of where things live and what the main sections do. If not, the Strategy Builder Complete Guide walks through the layout, modes, and logic structure in detail and is a good place to start before stress-testing an idea.
Reminder: This is an educational walkthrough on using the platform. It is not investment advice. Backtests reflect historical data and do not predict future results.
1) Start with a clean template
Open the Strategy Builder, switch to Edit, and confirm you’re testing the right context:
Choose Long or Short.
Pick your timeframe (example: Daily).
Pick a lookback window (example: 5Y or 10Y).
By default, you’ll see a placeholder strategy:
Buy When: Buy And Hold
Sell When: Never Sell
That is expected. You are about to replace it with your idea.
Tip: If your Strategy Stats panel is already showing results before you touch anything, that’s the placeholder strategy doing its thing.
2) Write your entry rule (Buy When)
Click the Buy And Hold row to expand the condition builder. Every condition follows the same structure:
Study + Interaction + Study Comparison
Choose a Study first. Once you do, the Interaction options and the Study Comparison field appear.
Example: If your idea is “enter on a bullish shift,” you might build a Buy When rule using a candle or momentum study, then choose an interaction like “crosses above” or “is above” depending on how strict you want the entry to be.
General guidance: Keep your first entry rule simple. You’re testing the idea, not trying to win a beauty contest.
3) Write your exit signal (Sell When)
Now define what makes you leave a trade using Sell When. This is your “close the position because the signal changed” logic.
Click Never Sell to expand it and build your condition using the same structure.
[General guidance] If you can’t describe your exit in a plain-English sentence, your strategy is going to feel mysterious later, and not in a fun way.
4) Add a safety net (Exit When: Custom Exits)
Sell When is not the only way a trade can close. Exit When gives you rule-based exits that behave more like trade management.
Click Exit When, then choose the Custom Exit type you want:
Profit Target or Stop Loss
Trade Length
Trailing Stop
Trailing Stop quick setup
If you choose Trailing Stop, you can set it as a percent or a raw value.
In the Strategy Builder, the trailing stop measures from the highest price point reached and triggers when price moves against that high by the percent (or raw value) you set.
If your strategy looks great until you zoom in on the worst trades, a stop-loss style exit is often the first place to stress-test.
5) Add studies quickly using the Add Studies panel
If you prefer faster building, use the collapsible Add Studies… panel at the bottom.
Collapsed state:
Expanded state (search, categories, favorites, exits):
To add a study, drag it from the panel and drop it directly into the condition row where you want it.
[General guidance] Drag-and-drop is ideal when you’re building multiple conditions and you already know what studies you want.
6) Decide if your logic is AND or OR
This is where a lot of “why is this strategy acting weird?” moments come from.
If you add another condition inside the same group, it’s AND logic. Every condition must be true.
If you add another group, it’s OR logic. Any group can trigger.
Use these controls:
Add Condition = adds to the current group (AND)
Add Buy Group / Add Sell Group = adds a new group (OR)
[General guidance] When a strategy is firing too often, OR groups are a usual suspect. When it barely trades, your AND stack might be too strict.
7) Read your results like a skeptic (Strategy Stats panel)
As you make changes, the Strategy Stats panel updates so you can see the impact immediately.
Start in Overview to get a quick pulse, then go deeper.
[General guidance] Your first pass is not “is this profitable.” Your first pass is “does this behave the way my idea behaves.”
Then check Trades to confirm the strategy is doing what you think it’s doing. Pick a recent trade and review its details and trigger signals.
[General guidance] If a trade closed and you can’t immediately explain why, your next move is to re-check Sell When and Exit When, then verify whether your interaction type is too sensitive (crosses) or too persistent (is above).
8) Stress-test without accidentally training a pet strategy
Once your rules behave correctly, stress-test the idea without constantly “fixing” it into perfection.
[General guidance] Change one thing at a time. If you change the entry, the exit, and the timeframe all at once, you won’t know what caused the improvement.
[General guidance] Try multiple lookback windows. A strategy that only works in one slice of history might be describing that slice, not the market behavior.
[General guidance] Watch trade count and outliers. If most of the performance comes from one massive trade, you might be looking at a fun story, not a repeatable rule set.
Where to go next
If you’ve reached the point where your logic is clean and the trades make sense, the next step is usually one of these:
Strategy Builder Complete Guide: Get a full walkthrough of the Strategy Builder layout, View vs Edit mode, condition structure, grouping logic, Custom Exits, and how to read the Strategy Stats panel.
Interactions Complete Guide: to understand exactly how each interaction triggers and how that affects timing and frequency.
Strategy Logic Guide: to go deeper into how strategy states behave over time (Starting, Active, Ending, Inactive) and how signals are evaluated.