Backtesting

What is backtesting?

Backtesting is a simulation technique where you apply your chosen strategy to historical market data to see how it would have performed in the past. It’s an essential tool for evaluating a rebalancing strategy before committing real funds, as it allows you to:

  • Measure potential profitability over different timeframes.

  • Test strategy settings (frequency, triggers, allocations) without financial risk.

  • Understand volatility and drawdowns before you start live trading.

  • Compare different approaches to find the most effective one.

Why it’s useful

Rebalancing is often a long-term strategy, and small differences in settings can significantly impact results. With backtesting you can:

  • Avoid costly trial-and-error with real money.

  • See how your strategy handles different market conditions (bull, bear, sideways).

  • Identify the optimal rebalance frequency and allocation mix for your portfolio.

How it works in RebalanceNow.io

The Backtest Rebalancing tool runs your configured strategy on historical daily price data. Once complete, you can view the results, analyze performance metrics, and download the CSV for deeper analysis.

Fields you can set

Backtest Period

  • Start Date / End Date: Select any period up to a maximum of 10 years (from 2017-01-01 to today).

  • Rebalance Frequency: Choose how often the rebalance is simulated (e.g., Daily, Weekly, Monthly).

Rebalance Triggers (optional)

  • Coin Up % Trigger: Rebalance if a coin’s value increases by at least X% since the last rebalance.

  • Coin Down % Trigger: Rebalance if a coin’s value decreases by at least X%.

ℹ These triggers use daily price data at 00:00 UTC and may be less effective for very short rebalance frequencies.

Fee & Threshold

  • Fee Rate (%): Enter your exchange’s trading fee percentage.

  • Minimum Rebalance Threshold (€): Prevents rebalancing if the trade value is too small.

Coin Allocations

  • Total Initial Investment (€): Enter the total portfolio amount or leave empty to calculate from individual coin entries.

  • Define Coin Allocations: Select the coins and assign either allocation percentages or fixed Euro amounts. The total allocation must equal 100%.

PreviousDCA (Dollar Cost Average)

Last updated