Backtesting is one of the most crucial steps in developing any profitable trading strategy. It’s the process of testing your strategy on historical market data to see how it would have performed in the past. The logic is simple: if a strategy couldn’t make money historically, it’s unlikely to make money in the future.
The problem? Most traders assume that you need to know Python, R, or some other programming language to backtest effectively. That assumption often stops beginners from even trying. I was in the same boat a few years ago. I thought, “Unless I learn coding, I’ll never be able to test strategies properly.”
Then I discovered that you can backtest strategies effectively without writing a single line of code. Today, I’ll share exactly how I do it — what tools I use, my process, the mistakes I made early on, and how I interpret the results to create real trading systems that work.
Why Backtesting Matters Before Risking Real Money
Imagine going to war without checking your weapon. That’s what trading without backtesting is like. You wouldn’t deploy your hard-earned money based on a hunch or a random YouTube video (at least I hope not).
Backtesting does three important things:
Validates your idea: It tells you if your strategy has an edge or if it’s pure randomness.Builds confidence: When you see a strategy make money over 5 years of historical data, you feel more confident executing it live.Reveals weaknesses: No strategy is perfect, but backtesting shows the drawdowns, losing streaks, and conditions where it fails.
Skipping this step is one reason most traders blow their accounts. I’ve done it. I bought into hype strategies, ran them live, and watched my account evaporate because I didn’t check if they worked historically.
The No-Coding Backtesting Tools I Use
The good news is, there are amazing tools out there that let you backtest visually or with simple clicks. Here are my go-to platforms:
1. TradingView
This is my favorite tool for visual backtesting. TradingView has a replay feature that allows you to simulate past markets in real-time. You can scroll back, hide future candles, and trade as if you’re in that moment. It’s perfect for discretionary strategies like price action, support/resistance, and breakout trades.
Why I love it:
You can hide future price action and step through bar by bar.All major indicators are available.It works for crypto, forex, stocks — pretty much everything.
2. FX Replay (for Crypto and Forex)
This is like TradingView on steroids for backtesting. FX Replay lets you simulate markets with realistic execution speed, multiple timeframes, and even order management. It’s a paid tool, but worth it if you want detailed practice without coding.
3. Manual Spreadsheet Backtesting
For rule-based strategies, nothing beats Excel or Google Sheets. You don’t need coding to calculate win rates, profit factor, or drawdowns. You just need discipline.
How I do it:
Go through historical charts manually.Note down every trade that fits my strategy in a sheet.Record entry, stop loss, target, result (win or loss), and notes.Analyze the numbers after 50–100 trades.
It’s slow, but incredibly educational.
My Backtesting Workflow (Step by Step)
Here’s how I backtest any strategy without writing code:
Step 1: Define the Strategy Rules Clearly
You can’t test a strategy if it’s vague. “I’ll buy when the chart looks bullish” is not a strategy. It’s guesswork.
Instead, make it objective. For example:
Setup: Price closes above the 50 EMA and RSI is above 50.Entry: Buy on the next candle after the setup.Stop Loss: Below the recent swing low.Take Profit: 2R (twice the risk).
The clearer your rules, the more accurate your backtest will be.
Step 2: Choose Your Testing Period
Don’t cherry-pick data. I usually test:
At least 1–2 years of historical data for short-term strategies.3–5 years for swing trading strategies.
This gives a better picture across different market conditions — bull, bear, and sideways.
Step 3: Go Candle by Candle
This is where the replay feature in TradingView shines. Here’s what I do:
Scroll back to the starting point.Hide future candles.Move forward one candle at a time and check if my setup appears.If it does, I log the trade details in a spreadsheet.
This process forces discipline and gives you a realistic sense of what trading feels like in real time.
Step 4: Record Every Detail
My spreadsheet includes:
Date & TimeEntry PriceStop LossTake ProfitRisk-Reward RatioResult (Win/Loss)Notes (like “entered late” or “high volatility news day”)
The notes section is gold because it helps you identify patterns in your mistakes later.
Step 5: Analyze the Data
After 50–100 trades, I calculate:
Win Rate (Number of wins ÷ Total trades)Average R per tradeProfit Factor (Gross profits ÷ Gross losses)Maximum DrawdownLongest Losing Streak
These numbers tell me if the strategy has an edge. For example, if my strategy wins 45% of the time but has an average R of 2.5, it’s profitable.
What Backtesting Taught Me (and My Mistakes)
I’ve backtested dozens of strategies this way. Some worked great historically but failed live. Others looked terrible on paper but were solid when combined with other filters.
Here are a few lessons:
1. Don’t Overfit to Past Data
It’s tempting to tweak rules until the backtest looks perfect. This is called curve fitting, and it kills strategies in live markets. A strategy that works in real life doesn’t need to be perfect historically — it just needs an edge.
2. Include Losing Streaks
Most beginners only look at win rate. Big mistake. A strategy with a 40% win rate can still make money if the risk-to-reward ratio is good. But you need to be prepared for long losing streaks emotionally and financially.
3. News Events Change Everything
Some strategies look amazing until a major news event wipes out 3 trades in a row. I learned to mark news events in my backtests to see how they affect results.
Can You Trust Backtesting 100%?
No. Backtesting is a simulation. It doesn’t account for slippage, liquidity issues, or your own psychology in live trading. That’s why I always move to forward testing (paper trading) after a successful backtest before going live with real money.
My Favorite Strategy Backtest (Example)
One of the first strategies I tested was a simple EMA crossover system:
Buy when the 9 EMA crosses above the 21 EMA.Sell when the 9 EMA crosses below the 21 EMA.
I tested this on BTC/USD over 2 years manually. The results?
Win Rate: 38%Average R: 2.2Net Profit: Positive (because of high RR)
Was it perfect? No. It struggled in choppy markets. But with a trend filter and higher time frame confirmation, it became one of my go-to systems.
Final Thoughts: Backtesting Without Coding Is Possible
You don’t need to be a programmer to validate your strategies. All you need is:
A clear set of rulesThe right tools (TradingView, spreadsheets, FX Replay)Patience to go through the data manually
The truth? Manual backtesting made me a better trader because it forced me to see how markets move historically. It’s time-consuming, yes, but it’s the most educational experience you’ll have in trading.
If you haven’t done this yet, start today. Pick one strategy, open TradingView, and start testing. Your future self will thank you.
How I Backtest Strategies Without Coding was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.