How to Run a Backtest on Freya Finance: The Complete Guide

#How to Run a Backtest on Freya Finance: The Complete Guide

Backtesting lets you run a strategy against real historical market data to see how it would have performed — before you risk a single dollar live. Freya's backtester is comprehensive: it doesn't just give you a profit number, it produces a full set of charts, performance metrics, advanced risk analytics, a trade-by-trade breakdown, and even an AI analysis of the result.

This guide walks through the whole flow: setting up a backtest, reading every part of the result, and understanding what's available on each plan. For the underlying theory, pair it with How to Backtest a Crypto Strategy and Interpreting Backtest Results.

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#A Quick Overview of the Steps

1. Open the backtest screen from your dashboard.
2. Choose a trading pair and the date range you want to test over.
3. Set your strategy configuration and a starting capital.
4. Run the backtest and wait for it to process.
5. Read the results — the charts, the metrics, the trade list, and the AI analysis.

#Step 1: Set Up Your Backtest

A backtest needs a few inputs:

• Trading pair — the market to test, like BTC/USDT (a base coin and a quote coin).
• Date range — the historical period to simulate over. How far back you can go depends on your plan (3 months on Free, 12 months on Plus, unlimited on Pro).
• Strategy configuration — the same kind of settings you'd give a live bot: entry conditions, your grid of orders, and your exit rules. If you're new to these, see How to Create Your First DCA Bot.
• Starting capital — the simulated balance the backtest begins with, so the results are scaled to a realistic account size.

#Step 2: Run It

Once your inputs are set, run the backtest. Each run counts toward your monthly backtest allowance (4 on Free, 20 on Plus, unlimited on Pro). The engine replays the historical candles, simulates every entry and exit your strategy would have made, and then builds the full result.

#Reading Your Results: The Key Metrics

The headline numbers tell you how the strategy performed and how much risk it took to get there:

A strategy with a high net profit but a brutal max drawdown isn't necessarily a good one — the metrics together tell you whether the returns were worth the risk.

#The Charts

Freya turns the simulation into visuals so you can see how the strategy behaved:

• Candlestick chart with trade markers — the price chart for the period, with every entry and exit marked and labeled by its exit reason and profit or loss.
• Equity curve — how your simulated balance grew (or shrank) over time. A smooth, rising curve is healthier than a jagged one.
• Drawdown curve — how far below its peak your equity fell at each point, so you can see the depth and duration of losing stretches.
• Monthly returns — performance broken down month by month.
• PnL distribution — the spread of trade outcomes, showing whether profits come from many small wins or a few big ones.
• Win rate chart — your win rate visualized across the test.

#Going Deeper: Plus Analytics

On the Plus plan, the result expands with advanced analytics that go beyond the basics:

• Sharpe Ratio — your return relative to overall volatility; higher means better risk-adjusted performance.
• Sortino Ratio — like Sharpe, but it only penalizes downside volatility, so it better reflects the risk that actually hurts.
• Monte Carlo simulation — reshuffles your trades thousands of times to show a range of possible outcomes, not just the single historical path.
• Walk-forward analysis — splits your data into an in-sample portion (~70%) and an out-of-sample portion (~30%), then checks the strategy on the data it wasn't fitted on and scores how consistently it holds up (a robustness score).
• Value at Risk (VaR) — an estimate of how much you could lose in a bad scenario.
• Streak analysis — your longest runs of consecutive wins and losses.
• Time heatmap — when the strategy performs best, broken down by time.
• Exit-reason stats — how often trades closed via take-profit, stop-loss, and other exits.
• Recovery and market exposure — how quickly the strategy recovered from drawdowns and how much of the time it held a position.
• Rolling metrics — how figures like win rate evolved over the course of the test, rather than as a single average.

#Let Freya AI Analyze It

On Plus and Pro, Freya AI can analyze your backtest for you — reading the metrics and trade behavior and explaining what's strong, what's risky, and what to consider, in plain language. It turns a wall of numbers into an opinion you can act on. (AI analysis isn't included on the Free plan; Plus includes a daily allowance and Pro is unlimited — see Freya Finance Plans.)

#The Deals List

Beyond the summary, you can open the full list of every simulated trade the strategy made, and drill into any single one to see its entry, exits, and result. This is where you check that the strategy behaved the way you intended — not just that the final number looked good.

#Comparing Backtests

You can also compare backtests side by side to see which configuration performed best. The number you can compare at once depends on your plan: 2 on Free, 4 on Plus, and 10 on Pro.

#What Limits Apply on Each Plan

#Frequently Asked Questions

#How do I run a backtest on Freya Finance?

Open the backtest screen from your dashboard, choose a trading pair and a date range, set your strategy configuration and a starting capital, and run it. The engine replays the historical market, simulates your strategy's trades, and produces charts, metrics, a trade list, and (on Plus and Pro) an AI analysis.

#How far back can I backtest?

It depends on your plan: 3 months on Free, 12 months on Plus, and unlimited history on Pro. The date range you pick must fall within your plan's limit.

#How many backtests can I run?

4 per month on Free, 20 per month on Plus, and unlimited on Pro. Each run counts toward your monthly allowance, and your plan also limits how many results you can store at once.

#What's the difference between the Sharpe and Sortino ratios?

Both measure risk-adjusted return. The Sharpe ratio compares your return to total volatility — all of it, up and down. The Sortino ratio (available on Plus) only counts downside volatility, so it focuses on the risk that actually costs you money. A strategy can look better under Sortino if its swings are mostly to the upside.

#What is max drawdown and why does it matter?

Max drawdown is the largest drop from a peak to a subsequent trough in your equity — the worst losing stretch the strategy went through. It matters because it tells you the pain you'd have had to sit through. A strategy with strong returns but a very deep drawdown may be too risky to run with real money.

#Can Freya AI analyze my backtest?

Yes, on the Plus and Pro plans. Freya AI reads your backtest's metrics and trade behavior and explains its strengths, risks, and what to consider, in plain language. The Free plan doesn't include AI analysis.

#Why did my backtest show no trades, or too few to trust?

If your backtest came back with no trades, your bot's entry conditions most likely never triggered during the period you chose — the indicators never reached your thresholds. Widen the date range or loosen the entry conditions and run it again. If it produced only a handful of trades, treat the result with caution: a strategy judged on very few deals isn't statistically reliable, so extend the period until there are enough trades to draw a meaningful conclusion. See Interpreting Backtest Results for how many trades make a result trustworthy.

#Does a good backtest guarantee future profits?

No. A backtest shows how a strategy would have performed on past data, which is a valuable signal but not a promise. Markets change, and past performance doesn't guarantee future results. Use backtests to compare and refine strategies, manage risk, and set expectations — not as a guarantee. Interpreting Backtest Results covers this in depth.

#Is there a demo or paper-trading mode to practice without real money?

There isn't a separate paper-trading/demo mode — but backtesting is your risk-free practice tool. It runs your exact strategy against historical data without putting any money at stake, so you can refine settings and build confidence before going live. When you're ready to trade for real with a small amount, see Realistic Expectations: Can I Lose Money? first.