How we backtest our trading strategies
Every result on AlgolaneBots is a historical backtest: a computer runs a strategy's fixed rules over past prices and records what its account would have been worth. Nobody earned these returns, and future results will differ. This page explains exactly how the numbers are made so you can judge them yourself.
Test periods
- US strategies are shown from January 2011. Market Switch starts in November 2011, when its real funds begin.
- Gold Breakout is shown from June 2004, using long-history gold data up to 2024 and gold futures after that.
- Every line starts at $10,000 on its first day, so each strategy and its benchmark begin from the same amount.
What we compare against
US strategies are compared with holding the S&P 500 (SPY) and the Nasdaq 100 (QQQ) over exactly the same days. Gold Breakout is compared with simply holding gold. A strategy result means little without that comparison.
How the figures are measured
- Average per year is the compound annual growth rate over the whole period.
- Worst fall is the largest drop from a previous high to a later low (maximum drawdown).
- Recovery is how long the account took to get back to where it was before a fall.
Crash tests
We measure each strategy in four market crashes: the dot-com crash (2000 to 2002), the financial crisis (2007 to 2009), the Covid crash (2020) and the 2022 rate-hike bear market, beside the benchmark over the same dates. Leveraged Growth and Market Switch have no real-fund history before 2011, so their earlier crash figures come from a simulated three-fund version and are labelled that way.
How paper trading differs
Paper accounts use real prices and pretend money. Orders fill at the next real market open, a 0.05% cost is taken off every fill, and prices are adjusted for stock splits. Paper results still miss real-world effects such as partial fills and the stress of real losses.
Known biases we disclose
- Hindsight: Big Tech Trend's stock list and Steady Growth's seven names were chosen with hindsight, which flatters their tests.
- Concentration: three stocks made 81% of Big Tech Trend's tested profit, and nearly half of Market Switch's came from UVXY.
- Costs: doubling trading costs cuts Gold Breakout's yearly result roughly in half.
- Compounding: very large end values from leveraged funds could not be reached at real trade sizes.
Check it yourself
See each strategy's full results on the strategies page, read the risk disclosure, or run any strategy on a $10,000 paper account, free for 3 months, by signing up.