Help: how BacktestLab works
Answers to common questions and a glossary of the terms used on the platform: zones, triggers, entries, risk and costs.
Platform overview
Work in BacktestLab follows a five-step route. A strategy is described as a chain: zone of interest, trigger, confirmation and entry. The backtest runs it on historical data with the same engine the bot later trades with.
Strategy chain
- 1ZoneWhere a price reaction is expected: imbalance, order block, level, range.
- 2TriggerAn event that makes the zone relevant, for example a liquidity sweep.
- 3ConfirmationAn extra condition before entry, for example a break of structure.
- 4EntryThe rule for opening a trade, stop, take profit and risk.
Questions and answers
Platform
What is BacktestLab?
A platform for building trading strategies without code, testing them on historical data and running a bot on MetaTrader 5. The backtest and the bot share one engine, so the bot trades exactly the strategy that was tested.
What is a backtest, and does it guarantee results?
A backtest replays a strategy on historical data: where it would have opened trades and with what result. It shows how the strategy behaved in the past but does not guarantee future results: markets change, and a strategy fitted to history may fail on new data.
What data is used?
One-minute bars (M1) for more than 100 instruments: currency pairs, metals, indices, commodities, crypto and stocks, mostly from 2021. Higher timeframes are built from M1 on the broker clock, so the candles match what the bot sees in MT5.
Are commission, spread and swap included?
Yes, always. Every trade is calculated with commission, spread and swap from the broker profile (see “Broker profiles”). A result without costs is only available as an explicit choice and is labelled separately.
Strategies and backtests
What is needed to run a backtest?
An instrument, a period and a strategy chain: zone, trigger and entry rule (confirmation is optional), plus stop, take profit and risk per trade. Other parameters have default values that can be changed in the “New backtest” form.
Why did the backtest find no trades?
The usual causes: a short period, narrow sessions or filters, or chain steps that rarely line up in time (for example, a lower-timeframe trigger has to fire while the higher-timeframe zone is still active). Try a longer period or relax one filter.
How many trades are enough to trust a result?
The more, the more reliable. A result on a few dozen trades may be random; a reasonable guide is 100 trades or more across different market conditions. Also compare results by year and by instrument: a robust strategy does not depend on one lucky period.
What is overfitting and how to avoid it?
Fitting parameters to a specific history so closely that the strategy describes past noise rather than a stable pattern. Signs: a sharp drop after a small parameter change, a result that rests on a few trades or a single year. Check changes on another period or instrument.
Can a strategy be tested on several instruments at once?
Yes. Select several instruments in the form: the backtest runs them together and shows the result for each one separately.
What are repeat backtests and folders?
A repeat backtest runs the same strategy with changed parameters. All iterations of one strategy are collected in a folder that shows what changed and how it affected the result.
Bots
How is a bot related to a backtest?
A bot is created from a backtest result and uses the same engine, so it trades exactly the tested strategy with the same parameters.
Which broker and account are needed?
The bot trades through the MetaTrader 5 terminal with any broker that supports it. We recommend running the bot on a demo account first and connecting a live account after verification.
Where does the bot run?
The bot runs in the BacktestLab agent next to the MT5 terminal. During the beta the connection is set up together with the team: send a request via “Feedback”.
What happens to open positions if the bot stops?
Each position's stop loss and take profit are placed with the broker, so they trigger without the bot. After a restart the bot finds its positions in MT5 and continues managing them.
Why does a bot trade differ from the backtest trade?
Live execution differs from history: spread and slippage at entry, delays, trading breaks. Bot trades and their result in broker money are in “Trade journal”.
Security and risk
Who can see my strategies?
Backtests, folders, templates and bots belong to your account and do not appear in other users' lists. The platform administrator has access for support.
How are account passwords stored?
Your MT5 account password is stored on the server only in encrypted form, and the encryption key is kept apart from the data and its backups. The password is never sent back to the browser: forms only show that it is saved, and you can leave the field empty to keep it unchanged. It is decrypted only when your bot's agent fetches its configuration to log in to MT5. The bot needs the trading password — the investor password cannot open trades.
Can I lose more than my deposit?
Leveraged CFD and forex trading carries a high risk of losing money. Whether the balance can go negative depends on the broker: check whether your broker offers negative balance protection.
Beta testing
What does beta testing mean?
The platform works, but features are still changing and temporary errors are possible. During the beta all features are free.
How do I report an issue or suggest an improvement?
Via “Feedback” at the bottom of the menu on every page. The page address and technical details are attached automatically, and the request status is shown in the same window.
Glossary
- Zone of interest (POI)
- An area of the chart where a price reaction is expected: imbalance, order block, level or range boundary. The first step of a strategy chain.
- Trigger
- An event that makes the zone relevant for entry, for example a liquidity sweep near the zone.
- Confirmation
- An extra condition before entry, for example a break of structure on a lower timeframe.
- Entry
- The rule for opening a trade: a market order or a limit order at a given level.
- Setup
- A chart situation in which every step of the strategy chain has been met and a trade can be opened.
- FVG (imbalance)
- Fair value gap: the space between the wicks of the first and third candles that the second candle does not cover.
- Order block
- The last opposite candle before a strong impulse — a zone where large orders were likely placed.
- Raid (liquidity sweep)
- Price moves beyond a previous high or low and returns: it takes the stops and orders resting beyond the level.
- BOS (break of structure)
- A break of the last significant high or low in the direction of the move.
- CHoCH (change of character)
- The first break of structure against the previous move — a sign of a possible reversal.
- Fractal
- A candle whose high (low) is above (below) its neighbours: a local top or bottom.
- Range
- Sideways movement between stable boundaries — a high and a low.
- Session range
- The high and low of a session (usually Asia); price later sweeps beyond one of them, takes the liquidity and reverses.
- Deviation
- Price moves beyond a range boundary and returns inside.
- Channel
- A sloped range: two parallel lines that contain the price.
- Expansion and consolidation
- Expansion is a strong directional move; consolidation is the pause after it, when price compresses into a narrow range.
- Dealing range
- The range between a significant high and low; the upper half is premium, the lower half is discount.
- Levels (PDH/PDL)
- The high and low of the previous day, week or session — places where liquidity accumulates.
- Sessions
- Trading periods of the day: Asian, London, New York. Session boundaries are counted in New York time.
- Kill zone
- The most active part of a session, when impulses form most often.
- Timeframe (TF)
- The duration of one candle: M1 — a minute, H1 — an hour, D1 — a day.
- OTE
- Optimal trade entry: a 62–79% retracement of an impulse by Fibonacci levels.
- Stop loss (SL)
- The level at which a trade is closed at a loss to limit it.
- Take profit (TP)
- The level at which a trade is closed in profit.
- R
- A unit of risk: the distance from entry to stop. A result of +2R means a profit twice the risk.
- RR
- Reward-to-risk ratio: RR 3 means the take profit is three times further from entry than the stop.
- Breakeven (BE)
- Moving the stop to the entry price after price has moved a set distance into profit.
- Risk per trade
- The share of the deposit lost by a trade closed at the stop, for example 1%. Position size is calculated from it and the stop distance.
- Lot
- The unit of trade volume in MT5.
- Win rate (WR)
- The share of profitable trades. Without RR it says nothing about profitability.
- Profit factor (PF)
- Gross profits divided by gross losses. Above 1 means the strategy makes money.
- Drawdown
- The largest drop in equity from a previous peak, in money or percent.
- Net and gross
- Gross is the trade result before costs; net is after commission, spread and swap. BacktestLab results are net.
- Spread
- The difference between the buy (ask) and sell (bid) price — a hidden cost of every entry.
- Swap
- A charge or credit for holding a position overnight; for most currency pairs it is tripled on Wednesday.
- Commission
- The broker's fee per trade, usually per lot for both sides.
- Market and limit orders
- A market order fills immediately at the current price; a limit order fills only when price reaches the set level.
- Invalidation
- A condition that cancels a setup before entry: for example, price broke through the zone or the waiting time ran out.
- Backtest and forward test
- A backtest checks a strategy on past data; a forward test checks it on new data that was not available while tuning.
- Overfitting
- Fitting parameters to history so closely that the strategy fails on new data.
- Deep study
- A series of extra runs showing how the result would change with a different RR, breakeven or entry offset.
Contact
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