Backtesting your trading strategy is one of the best ways to find out if it’s consistently profitable. You can also use backtesting tools to make adjustments to your strategy and find out what market conditions it’s best-suited for.
Choosing the right stock backtesting software is essential to getting the data and insights you need to optimize your trading. We’ve tested out more than a dozen backtesting tools to bring you our top 5 picks:
Overall Best Backtesting Software – TrendSpider
Best Backtesting Software with Bar Replay – TradingView
Best Advanced Backtesting Tool – Trade Ideas
Best Free Backtesting Software – Tradewell
Best Backtesting Software for Investors – Stock Rover
The 5 Best Stock Backtesting Software
Let’s take a closer look at our favorite backtesting tools to help you decide which is best for your trading style.
Overall Best Backtesting Software – TrendSpider
TrendSpider is our overall favorite backtesting software. It’s customizable enough to allow you to test any strategy based on price movements or technical indicators, but there’s no coding required.
In addition, because TrendSpider can automatically plot trendlines and candlestick patterns on charts, you can include trendline crosses and candlestick patterns in your strategy. That’s not possible with most other backtesting tools.
TrendSpider gives you plenty of control over your strategy’s exit conditions, enabling you to set up trailing stops, profit targets, and candle limits. You can view each entry and exit on a technical chart plus chart your strategy’s overall results to see how well it works. If you want to optimize your strategy, you can make changes, run it again, and TrendSpider will show you the new results side-by-side with your previous results.
The only major drawback to TrendSpider is that you can only run strategies on a single ticker symbol at a time, not on sets of symbols.
Key Features:
Build strategies that incorporate trendlines and candlestick patterns
No coding required to build custom strategies
View entries and exits on advanced technical charts
Compare results side-by-side when optimizing your strategy
Best Backtesting Software with Bar Replay – TradingView
TradingView lets you build and test trading custom strategies using a Pine script editor. While there’s some coding involved, it’s fairly easy to use. You can rely on more than 100 built-in indicators and a huge selection of community-contributed trading strategies if you want to avoid writing your own code.
TradingView’s strategy backtester displays key performance metrics about your strategy such as net profit, maximum drawdown, Sharpe ratio, win-loss ratio, and more. You can also view every trade your strategy would have made in a data table or on your stock chart.
What’s really great about TradingView’s backtester is that you can use bar replay to go back and see how price action played out when your strategy triggered. For example, a day trader can see how candlesticks formed heading into a profitable trade, then look for similar price action in the future. TradingView supports bar replay on all timescales, including 1 second bars.
Key Features:
Build custom strategies using a Pine script editor
Bar replay enables you to replay price action around entries and exits
Includes 100+ built-in indicators and millions of community-contributed strategies
View entries and exits on your charts
Best Advanced Backtesting Tool – Trade Ideas
Trade Ideas is one of the most powerful backtesting software platforms for experienced traders. Beyond simply offering a huge range of customization options for building strategies and specifying your backtest conditions, Trade Ideas offers dedicated tools to help you optimize your strategies.
As an example of how this works, say you have an intraday trading strategy that doesn’t appear profitable when you first run your backtest. With Trade Ideas, you can dive into your strategy to look at profitability over different intraday time intervals. You might find that your strategy is highly profitable if you apply it only within the first hour of the trading day.
Trade Ideas also lets you run backtests on sets of ticker symbols, so you can optimize your strategy by symbol, stock price, or other factors. You can run multiple backtests and compare detailed results side-by-side. It’s a great software for traders who want to dive in and understand at a deep level what aspects of their strategy work and what aspects could be improved.
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Key Features:
Optimize strategies based on symbol, time of day, stock price, and more
Compare backtest results side-by-side after making changes to your strategy
Supports intraday and swing trading strategy timeframes
Detailed data including profit, trades, and drawdown on a daily basis
Best Free Backtesting Software – Tradewell
Tradewell is one of only a handful of trading platforms that offers backtesting tools with its free plan. That makes it a great option for traders who are trying out backtesting for the first time or want to minimize their spending on trading software.
Tradewell’s free backtester includes five years of historical data and a variety of popular technical indicators. You can’t create your own indicators with Tradewell, but the interface is flexible enough to support most swing and momentum trading strategies.
Tradewell doesn’t require coding, so it’s pretty approachable for beginners. The software also offers several ways to visualize backtest results, including scatterplots, barcharts, and tables. The data is surprisingly in-depth and helps you analyze the likelihood that your strategy will be profitable over different timeframes.
Key Features:
Free backtesting with five years of historical data
Analyze probability of profits for future signals
No coding required to set up backtests
Paid users can backtest using up to 100 years of historical data
Best Backtesting Software for Investors – Stock Rover
Stock Rover doesn’t explicitly offer backtesting, but it allows you to screen historical stock data going back 10 years. If you’re comfortable using the platform’s equation editor (which is a little like coding), you can effectively create backtests. Stock Rover will display how a stock would have performed since it first passed your strategy screen up to the present.
What’s great about Stock Rover is that it’s more focused on fundamental investing strategies than trading strategies. You can build backtests around earnings growth, fair value models, analyst ratings, cash flow metrics, and more. Stock Rover also supports some common technical indicators, helping you specify entry and exit points for your backtest.
It’d be nice to see Stock Rover add a dedicated backtesting tool. But even without that, it’s one of the most powerful platforms enabling long-term investors to build custom backtests.
Key Features:
Build backtests with fundamental data
Offers 10 years of historical data
Specify entries and exits with technical indicators
View how stocks would have performed since passing your strategy requirements
What To Look For in Stock Backtesting Software
Here are some of the most important things to consider when choosing a backtesting tool.
Historical data: Backtesting software should offer at least 5-10 years of historical data, and ideally more. Analyzing more historical data can give you more confidence in your strategy and enable you to see how it might perform under very different market conditions.
Data visualizations: Your backtesting platform should give you multiple ways to visualize the results of your backtest. This could include plotting entries and exits on charts, offering scatterplots and barplots of trade returns, and line charts showing your account balance and drawdown. You should also get tables that show details about all of the trades executed during your backtest.
Support for custom strategies: Many backtesting tools require some degree of coding to build custom strategies. There are some no-code backtesting options, but make sure that these tools offer enough flexibility to allow you to test and tweak your strategy.
Strategy optimization tools: Strategy optimization tools can help you determine when or how to apply your strategy to maximize your profits. They can also help you tweak your strategy to minimize losses or your maximum drawdown, thus limiting your trading risk.
Stock Backtesting Software FAQs
How is stock backtesting software different from stock screening software?
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Stock backtesting software and stock screening software both enable you to create a custom trading strategy. However, backtesting tools enable you to see how your strategy would have performed in the past using historical price data. Screening tools help you find stocks that meet your strategy’s entry requirements right now.
How long should you backtest a trading strategy?
How much historical data to use to backtest a trading strategy depends on the timeframe of the strategy. It’s usually a good idea to backtest intraday strategies with several months of price data. Swing trading strategies may use several years of price data. Investing strategies may require 10 years of data or more to provide confidence in the results.
Conclusion: Best Stock Backtesting Software
Stock backtesting software can help you evaluate whether your trading strategy is profitable and optimize it to reduce your risk. TrendSpider is our pick as the overall best backtesting platform, followed by TradingView and Trade Ideas. Tradewell is the best free backtesting software, while Stock Rover is the best choice for long-term investors.
