The digital coin market is unpredictable. In order to profit from transactions, traders calculate actions ahead of time – create trading strategies. On Veles, these algorithms are embedded in bots. Users can choose a ready-made template or create their own robot. To test strategies on the platform launched backtesting. The tool allows you to assess the effectiveness of the trading plan without risk to capital. In the article, readers will learn how it works.
What is backtesting in cryptocurrency trading
Before opening a transaction in the digital market, traders analyze coin charts. Trading options can be seen in the changes in prices and transaction volumes.
Backtesting allows you to test an idea in different market conditions. This is done by creating a model based on historical data. Traders see how their strategies might work in the future and make more informed decisions.
Backtesting usually evaluates 2 key parameters: total return and risk level. Various indicators are used for this purpose. The tool also takes into account trading costs that can affect trading efficiency.
Veles – a platform for creating bots on the crypto market
Cryptocurrency exchanges trade assets 24/7. Regular traders cannot constantly monitor the market. In this regard, many use bots. Algorithms can be programmed to analyze rates, search for trading opportunities, open and close transactions on exchanges according to pre-designated input data.
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Veles offers a full set of tools for creating individual bots and entire automated strategies. The platform cooperates with leading crypto exchanges and helps to quickly connect a robot to any of them. Users can also take a ready-made bot template with a strategy embedded in it – conservative, moderate or aggressive.
There is no subscription fee for connection. Developers take 20% of trading profits, but no more than $50 per month.
In 2024 Veles has a new tool to test strategies before launching. It is based on the company’s developments that help identify market inefficiencies and capitalize on them.
Backtesting allows analyzing different market scenarios based on historical performance. Users can adjust algorithm settings before running them, which greatly improves their efficiency.
How Veles backtests work
The tool allows you to test the effectiveness of trading ideas without the risk of losing money. In essence, it is a modeling of market situations on historical data. A trader checks how well a strategy may have worked in the past. If the result is positive, it is advisable to apply it in real time.
Veles users have access to various tools to manage orders, positions and reduce risks. In the backtest mode, you can customize the parameters of trades to increase profitability.
Veles offers a database of minute candles to thoroughly analyze trading ideas. The “Profit” indicator on the chart shows the profitability of the strategy for a specific period without taking into account the exchange commission. This data is duplicated in the Gross (“dirty” income) line. Net profit minus transaction costs is shown in the Net field.
The “MPP” and “MPU” indicators display the maximum possible profit and loss values on open positions. This data can be used to customize the strategy – placing Stop Loss and Take Profit orders.
Advantages of the tool
With the backtesting function, the use of trading bots becomes more efficient and safe. Now traders can thoroughly analyze strategies before starting a deal – calculate potential profit, identify weaknesses that can lead to losses. Other advantages of the tool are also worth mentioning:
- By experimenting with the settings, it is possible to find the most profitable combinations and increase the profitability of the strategy.
- The trader no longer needs to collect statistics for a long time. Veles provides an extensive trading history of 2 thousand pairs and billions of candlesticks for analysis.
- Strategies can be tested on historical performance without risking real capital.
Technical features
The backtesting function automates the testing of trading ideas before launch. Thanks to the clear interface, the tool can be used even by novice traders. Technical advantages of Veles backtests:
- Proprietary market database with billions of minute candles.
- It is possible to test opening positions in parts, placing several orders.
- Traders are provided with detailed statistics to evaluate and optimize strategies.
- Also available is a set of indicators for analyzing volatility, trading volumes, determining overbought or oversold cryptocurrencies.
Rates
You can create and test trading strategies on Veles for free. The Free format is available for all registered users. On the paid tariff Pro opportunities are more. The price is $25 per month. You can compare tariff plans in the table below.
| Connected options | Free | Pro |
|---|---|---|
How to start the backtest of a trade idea
To get access to the functionality, you need to create an account on the site. Veles does not collect and does not store user data, so for registration it is enough to specify e-mail. You can also authorize with a Google account.
In the personal cabinet you need to perform test tasks to get a bonus $5. After that, you can proceed to creating a bot:
- Click on the corresponding button on the control panel.
- Choose an exchange for trading and create an API key. The Veles website has step-by-step instructions for activating each platform.
- Customize trading parameters. You can manage orders, automate your strategy with indicators and filters.
- To start the backtest, click on the “Analyze” key at the bottom of the page.
A terminal model for simulating trading with bots will appear on the screen. Here you can test strategies before implementation to increase potential profits and minimize losses.
Conclusion
Once a strategy has been tested and optimized, it can be applied in real trades. You need to realize that backtesting does not guarantee profitable trading. The tool will show how the strategy can work in different market conditions. This will allow the trader to make informed decisions, increase income and minimize risks.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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