⚠ WARNING: Never Trust TradingView's Strategy Tester!

Want to learn Pine Script? Look no further. I have you covered!

With over 15 years of coding experience and 4+ years of trading experience, I specialize in TradingView's Pine Script programming language and I'm here to pass on everything I've learned about both trading and coding.

This lesson demonstrates why you should never blindly trust the TradingView Strategy Tester system. The Strategy Tester is a great tool to assist in strategy development and backtesting, but it has some important limitations you need to be aware of.

MORE RESOURCES:

▼Timestamps▼
00:00 - Intro
01:03 - Strategy Tester's Limitations
07:05 - The Importance of Backtesting
09:07 - Why Use The Tester Then?
10:57 - Summary
13:28 - Outro

#PineScript #TradingView #Strategy

[GXR-TRADING]

7:18 "always manually backtest your strategies, there is no way to shortcut this process". "drawdown could be much higher, and percent profitable lower"

[TradersLanding]

This is an outstanding video. I added it to a playlist on my channel. I think every trader that uses the "backtester" NEEDS to see this video. I love the music you put in the background! Fantastic job.

[paulmarshall]

Your summary is everything I have learnt in the last 10 years - trust nothing and find your own answers. Excellent video!

[ezrakoper]

The strategy tester was improved since this video was published for the payed version enabling deep backtest that check internally smaller time frames inside the bar. It is not 100% accurate however much more accurate. It would be nice if you made same video now with the deep backtest enabled and report the new a acvuercy

[bluffrockstar]

You can specify the recalculation after order is filled, on every tick, or, on bar close

[arash]

As you mentioned, there are several of ways to mitigate this risk. Using close for entry, using value loss, and stop. Of course smaller timeframe is indeed a better option to backtest in TV. After publishing your strategy, you can look at the drawdown column in the "List of Trade" tab in the Strategy Tester. If the drawdown is higher than your stop loss, then your backtest isn’t valid .

[lavittoriasaranostrajk]

I'm sorry, but unfortunately this is almost completely wrong. If you have a strategy with indicators and you want to test it, you set the data, so to close the position you need to set it to 'wait for the candle to close' and wait for the candle to close regularly. If this is not how you set your strategy, then you should not test it the way you do it. So there's nothing wrong with backtesting, I think your strategy is wrong.

[s-miguel]

I like the informed honesty and very grounded approach! This is one of the best ways to teach. People can "sense" when someone's BS is lurking but we still want to believe and ignore it, or when you are being helpful and sharing valuable information, for free, that you know to be the truest to the best extent of your personal experience! Thank you for that :) Super subscribed for eternity

[Dylan-xjiz]

Love how the music builds tension in the intro!

[tolun]

One way to find possible problem trades is to code in the script where the entry-bars are large enough to stop you out. Then you can go in look at them manually. You'll get a feel pretty quickly for the % that was losing trades.

[kuldeepssharetradingsystem]

I keep it simple.. I test the strategy, set parameters of charts according to the timeframe I trade. Even though the profits are lesser than system output, but @20 to 25 % lesser only.

[brunomarangonfeitoza]

Always good to be aware. Indeed, I started to learn pine cause I wanted to plot something to show me when the candle is closed bc I was fooled quite sometimes. And got surprised by how hard was to find out how to consider only closed bars.

[kchng]

Thank you for this important info regarding the limitations of TV backtesting system.

[VascoFernandes]

Hi @The Art of Trading
I'm fairly new to pine script, and i'm trying to take advantage of learning already version 5. From what I've understood, strategy function is supposed to have a parameter to help for this, or am I totally wrong?:

calc_on_every_tick (const bool) Additional intrabar strategy calculations. If the parameter is 'true', then the strategy will calculate on every tick in real-time, rather than on bars' closes. The parameter does not affect strategy calculation on historical data. The default value is 'false'.


Do you currently make use of this? And still fails? Thanks for this awesome video, in any case.

[tiwam]

Thank you for the great video. I found this issue by myself when one of the strategy I made was too good to be true, but you explained it clearly that the system does not work tick by tick. But I still use it for testing my longer term stock trade strategy using weekly chart, typically winning position last longer than one year, something like that... Pine still can be used for this kind of trading. Of course I check transaction log one by one (but not all) for bug fixing.

[rcamarda]

TV is beta testing 'Deep Backtesting'. Is this new feature supposed to address the video conents?

[RMFP]

Quality info, thanks 👍 another thing that I've found to make a big difference between TV back tests and trading performance is spread. It's still a great tool to use as a guide as you say though.

[moregeekthanchictv]

Does the Bar Magnifier feature on the Pro+ version of the tester mitigate this problem?

[veejax]

Wow, this was extremely helpful. Thanks!

[KT_KT_]

Does using 1 or 2 time frame lower than the trading timeframe helps in improving the accuracy? Thanks