Understanding Results

After your backtest completes, Stratifyre presents a results page packed with information. This guide walks you through every section so you know exactly what you are looking at and how to interpret the numbers.

The Equity Curve

The equity curve is the large chart at the top of the results page. It shows how your account balance changed over the course of the backtest — starting from your initial capital on the left and ending at your final balance on the right.

What to look for:

• Overall direction. Is the curve generally moving up (profitable) or down (losing money)?
• Smoothness. A smooth, steadily climbing curve is ideal. Large jagged swings suggest the strategy takes on significant risk.
• Drawdowns. Look for the drops from peak to trough. How deep are they? How long do they last? Could you stomach a 30% drop that takes 6 months to recover?
• Consistency. Does the strategy make money steadily, or does all the profit come from a handful of lucky trades?

The equity curve also shows a drawdown overlay — a shaded area beneath the main line that highlights the depth and duration of each drawdown. This makes it easy to spot the worst periods at a glance.

Tip

Hover over any point on the equity curve to see the exact account balance, date, and current drawdown at that moment. Click on a point to jump into Time Traveling at that exact bar.

Summary Statistics

Below the equity curve, you will find a panel of summary statistics. These are the headline numbers that describe your strategy’s performance. Here are the most important ones:

Total Return

The percentage gain or loss over the entire backtest period. If you started with $100,000 and ended with $150,000, your total return is 50%.

This number alone does not tell you much — a 50% return over 10 years is very different from 50% over 1 year. That is why CAGR and risk-adjusted metrics exist.

CAGR (Compound Annual Growth Rate)

Your annualized return, accounting for compounding. This lets you compare strategies that ran over different time periods on an apples-to-apples basis.

• Above 15% CAGR is strong for most strategies.
• Above 20% CAGR is exceptional.
• But always look at CAGR alongside risk metrics — a 25% CAGR with 60% max drawdown may not be worth it.

Maximum Drawdown

The largest peak-to-trough decline in your equity curve, expressed as a percentage. If your account grew to $200,000 and then dropped to $140,000 before recovering, your max drawdown is 30%.

This is arguably the most important risk metric. It tells you the worst pain you would have experienced. Most traders cannot tolerate drawdowns above 20-30%.

Caution

Drawdowns in live trading always feel worse than they look on a chart. A 40% drawdown means your account needs to gain 67% just to get back to breakeven. Be honest about what you can handle.

Sharpe Ratio

A measure of risk-adjusted return. It divides your excess return (above the risk-free rate) by the volatility of your returns. Higher is better.

• Below 0.5 — Poor risk-adjusted performance.
• 0.5 to 1.0 — Acceptable.
• 1.0 to 2.0 — Good.
• Above 2.0 — Excellent (and rare for longer-term strategies).

Sortino Ratio

Similar to the Sharpe ratio, but it only penalizes downside volatility. Since traders do not mind upside volatility, many consider the Sortino ratio a better measure than Sharpe.

A Sortino ratio above 2.0 is generally considered good.

Win Rate

The percentage of trades that were profitable. A 60% win rate means 6 out of every 10 trades made money.

Note

Win rate alone is misleading. A strategy with a 30% win rate can be extremely profitable if the average winner is much larger than the average loser. What matters is the combination of win rate and reward-to-risk ratio.

Profit Factor

Gross profits divided by gross losses. A profit factor of 2.0 means the strategy made $2 for every $1 it lost.

• Below 1.0 — The strategy loses money.
• 1.0 to 1.5 — Marginal.
• 1.5 to 2.0 — Good.
• Above 2.0 — Strong.

Number of Trades

The total count of completed trades (entry + exit). This matters for statistical significance. A strategy with only 10 trades might have been lucky. A strategy with 500 trades gives you much more confidence in the results.

As a rough guideline, aim for at least 30 trades for the basic metrics to be meaningful, and 100+ for robust statistical conclusions.

The Trade Log

Below the summary statistics, you will find the trade log — a table listing every trade your strategy made during the backtest. Each row contains:

Column	What It Shows
Entry Date	When the position was opened
Exit Date	When the position was closed
Symbol	The instrument traded
Direction	Long or short
Entry Price	The price at which the position was opened
Exit Price	The price at which the position was closed
Quantity	Number of shares/contracts
P&L	Dollar profit or loss for the trade
P&L %	Percentage return on the trade
Duration	How long the position was held
MAE	Maximum Adverse Excursion — the worst unrealized loss during the trade
MFE	Maximum Favorable Excursion — the best unrealized gain during the trade

You can sort and filter the trade log by any column. This is useful for identifying patterns — for example, sorting by P&L to find your biggest losers and analyzing what went wrong.

Individual Trade Details

Click on any trade in the log to expand its details. You will see:

• The exact entry and exit signals that triggered the trade.
• A mini chart showing the price action during the trade with entry/exit markers.
• The order lifecycle — when the order was created, submitted, and filled.
• Any corporate actions that occurred during the holding period.
• Commission and slippage costs applied to the trade.

From the trade detail view, you can click Open in Strategy Replay to jump into that exact moment in the backtest and see the full strategy state.

Monthly Returns Heatmap

The results page includes a monthly returns heatmap — a grid showing your strategy’s return for each month of the backtest. Months are colored on a gradient from red (losses) to green (gains).

This visualization helps you spot:

• Seasonal patterns — Does the strategy consistently struggle in certain months?
• Regime changes — Was there a period where the strategy stopped working?
• Consistency — Are returns spread evenly or clustered in a few strong months?

Distribution Charts

You will also find histograms showing the distribution of your trade returns and daily returns. These help you understand:

• Whether your returns are normally distributed or skewed.
• How fat the tails are (i.e., how common are extreme gains or losses).
• Whether the strategy has a positive expected value per trade.

What “Good” Looks Like

There is no single set of numbers that makes a strategy “good” — it depends on your goals, risk tolerance, and time horizon. That said, here are some general benchmarks:

Metric	Decent	Good	Excellent
CAGR	8-12%	12-20%	20%+
Max Drawdown	Under 30%	Under 20%	Under 15%
Sharpe Ratio	0.5-1.0	1.0-2.0	2.0+
Profit Factor	1.2-1.5	1.5-2.0	2.0+
Win Rate	40-50%	50-60%	60%+

Caution

Be skeptical of backtests that look too good. A strategy with a 3.0+ Sharpe ratio, 50%+ CAGR, and under 5% drawdown over 10 years almost certainly has a bug or is overfit to the data. Use Monte Carlo Simulation to stress-test suspicious results.

Next Steps

• Dig deeper into the numbers — See Performance Metrics for detailed definitions of all 70+ metrics.
• Debug specific trades — Use Time Traveling to step through your strategy bar by bar.
• Stress-test your results — Run a Monte Carlo Simulation to see how robust your strategy is under randomized conditions.
• Understand the simulation — Learn how Execution Modeling affects your fill prices and trade costs.