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hey traders welcome back to another
panscript video in today's video i'm
going to be showing you how to add
a visual back tester to your strategy
scripts so this is a pretty cool feature
it shows how many trades your script
took what your win rate was and what
your ending balance was uh shows your
dollar return your pip return your max
drawdown and return as a percentage
and this is all based on
a setting in the settings menu
where you can input your starting
balance your risk per trade and there's
an option here to turn on or off this
feature so if that sounds like something
you'd be interested in adding to your
own scripts stick around and i'll show
you how
so for today's lesson i'm going to be
using a script that we use in a previous
lesson just to save time today's lesson
is not about the strategy script itself
it's about adding this little back
tester thing
to your existing scripts or future
scripts you make so for today's lesson
we're going to be working with the
hammers and stars strategy script that i
showed you how to create in a previous
lesson there'll be a link to that lesson
in the video description if you haven't
seen it and you're interested in how
this script works
but for today i'm going to maximize my
screen
open up the source code to the script
i'm going to remove all of the back
tester code
and we'll start from scratch and i'll
show you how i added this to the script
line by line so here we are with just
the standard
strategy script if you open up the
tester we have all our details here but
one problem with the backtester system
for me as a forex trader is i like to
trade a position size that is equivalent
to a percentage of my account balance so
i usually trade one percent
two percent maximum depending on
the strategy and the tradingview
backtester system doesn't allow you to
reflect that information on the
backtester system so what my code is
going to do when we write it out is it's
going to
use the same strategy tester information
but display that information as if we
were back testing using a fixed position
size percentage of our account balance
so without further ado let's get into
the lesson so i've written this code out
in such a way that it should be copy and
pastable into any script you write
by the way if i get
start looking sweaty in this lesson
that's because it's coming in the summer
here in australia and it's bloody hot
today
so the first thing i do here since this
is like a module it's a copy and
pasteable block of code
i like to comment it into its like like
comment the beginning and ending of this
block of code so i just called this
begin
tester code
i'll also add on the
end tester code
and now all of our tester code our
custom tester code is going to fall
between these
comments and i'm going to add a bunch of
white space on the bottom here so that
my footer doesn't get in the way of the
code all right so the first thing we
need to do is declare our balance
tracking variables and we have a bunch
of those here we have
um actually i'll just copy and paste
these over to save time
because it's not important that you
watch me write these out
we have a bunch of persistent variables
here and if you've watched any of my
previous lessons you know that
persistent just means these variables do
not reset on each bar that prints on our
chart once they are declared they stay
as this value until we overwrite the
value later if we did not have var on
the end of these then on every new bar
that prints on our chart these
variables would be reset and we don't
want that these variables are supposed
to track our strategy performance over
the
historical price action on our chart so
we want these to be persistent so we use
the var operator so we have our account
balance this is our current balance we
have a starting balance as well which
we'll get to in a second but this is our
balance that updates over the course of
historical testing we have our current
drawdown our max drawdown our maximum
balance this is used for calculating our
drawdown percent then we have our total
pips uh long winds short winds i don't
actually think i use these in this
particular script let me just check
yeah i don't use these particular
variables in our script so we can get
rid of these but if you wanted to
you could add
a tracker that tracks how many long
trades won and how many short trades won
for today i'm going to keep it as simple
as possible i don't want to over i don't
want to overload you guys with too much
information so we're going to stick with
total pips total wins total loss and
this will the total wins and total loss
will give us our overall win percentage
um these are the only variables we're
going to be tracking today but you can
track all kinds of things so like if i
add on the latest version of my ultimate
pullback indicator that i'm working on
if i hide the hammers and stars strategy
once this loads it takes a little while
because it's a very long script
nearly a thousand lines of code now so
it takes a while to compile there we go
so let me go to a market that it
performs quite well on
so here we are on euro dollar one hour
chart
um
also let me turn off
my indicator values just temporarily so
it doesn't draw over the top of this and
i'll turn off our indicator arguments as
well just because i have my screen
resolution so high that this is going to
draw over the top of our
tester thing
if i turn on my draw back test results
and turn all of these on you can see
that my ultimate pullback indicator is
tracking my average risk reward
my wins losses long wind percentage
short win percentage break even rate
this is just using a one-to-one
fixed target at the moment but if i were
to change
my exit reason here to like say use a
higher close lower close exit my average
risk reward will update so now we have a
1.18
average risk reward with a 51 win rate
and we had a 58 return with a 15 max
drawdown let me turn this exit reason
off um we also have our max adverse
excursion and our max favorable
excursion so this is how far price went
against us
before hitting our target is our max
adverse excursion our max favorable
excursion is how far price went
towards our profit target before coming
up and stopping us out and then i have
my danger zone which is the minimum win
percentage i need in order to turn a
profit if the win rate falls below this
then it's not profitable and so if we go
out to a different time frame
and try and find a time frame where it's
not profitable here we go you can see my
win rate turns red because 47 percent
with a one-to-one risk reward profile is
not profitable it's not above our 50
danger zone and this danger zone updates
based on our average risk reward so if i
turn on
this exit reason again you can see our
danger zone has changed because we have
a 1.14
average reward
so
the whole reason i am showing you this
is just to show you what's possible with
displaying
your custom back-tested data onto your
chart it makes the back-testing process
significantly more efficient and it
makes it easier for you to identify
markets that may be profitable to trade
with your particular strategy anyway
let's get back to
our
code so we have all of our persistent
balance tracking or performance this
should probably say performance tracking
variables
now let's
check
when a trade is closed for profit and we
can
track our performance metrics
based on profitable trades and then we
can track our losing trades as well so
this is uh detect
winning
trades
so if strategy.win trades
is not equal to strategy.win trades on
the previous bar this means that our
winning trades has changed the strategy
inbuilt strategy variable win trades has
changed which means we've won a trade
and so we can now update our
performance tracking variables based on
this if condition so the first thing
we're going to do is increment our
balance our trading balance actually
before we do this i need to add in
our start balance as a user input and
our risk portrayed as user inputs so
let's scroll all the way up to our user
input settings here
and i'm going to add my back tester
settings above my pi connector and auto
view settings section i'm going to paste
that in there and i'll just explain what
these are we have our start balance
which is just our starting balance by
default set to ten thousand dollars and
then we have a risk per trade which by
default is set to one so one percent of
our ten thousand dollar starting balance
it will be the risk we put on our first
trade and this one percent risk will
adjust based on our account balance so
if we lose a few trades it'll decrease
our risks
our position size if we win a few trades
it'll increase our position size then we
have our draw back tester setting so
this is just a little check box that
turns on or off our back tester
display
so now that we have those added to the
script we can
finish our if statement here so if we
just want to trade that means we need to
increase our count balance by one
percent or whatever our risk setting is
so here we would say
balance is
to be set to or overwritten with
this value which will be balance plus
our risk per
trade
divided by 100
to convert our whole number into a
percentage so this is just to make it
more intuitive for the user
we could get rid of the divide by 100
and just have this as 0.01 that would be
one percent but i think it's more
intuitive to work with whole numbers
here
so
to convert one into one percent in
mathematic mathematical terms we need to
divide one by one hundred to get zero
point zero one
and then we need to multiply this value
by our current balance so multiply by
balance and then we need to multiply
this risk
amount so this will give us our risk per
trade as a dollar amount or dollar
figure now we need to multiply that
dollar figure by our risk reward profile
so here i can add on rrr
which is our
risk reward setting in the settings menu
and so now when we win a trade our
balance will be updated it will be set
to our balance plus our risk dollars
multiplied by
our risk reward profile next up i track
the total pips we've made so for this i
just add total pips is set to total pips
plus and then all we need to do here is
use the abs function this is the
absolute function so if this this will
turn a negative number into a positive
number and for this we can just simply
minus our entry price
from our target price so t entry and t
target
are the variables that
track so this is a short trade if we
have a valid short set up we set t
target and t entry to the appropriate
price values
so by subtracting our t entry from our t
target and converting that into an
absolute number so a positive number
doesn't matter whether this is a short
trade or a long trade we will get how
many pips
we just made on this winning trade next
up we need to increment our total wins
tracker by total wins plus one so just
add one to our
win counter and then we need to check if
our
account balance is greater than our max
account balance
then we need to set max balance to
our current account balance and this is
used for tracking our drawdown so that
we can see um how far off we are from
our
new equity high so that's it for
tracking our winning trades next up we
just need to track our losing trades so
detect losing trades and for this we do
the same thing if strategy dot loss
trades
is not equal to strategy dot loss trades
on the previous bar then we've just had
a change in our losing trade counter
that means we just lost the trade
and now we can we can pretty much copy
this code here release this code here
and paste it in here and now we need to
change a few things here so we need to
subtract
our dollar risk multiplied by our risk
reward
actually we don't want to multiply this
by our risk reward because our risk
reward profile doesn't matter for our
loss it will always be one risk one r so
we will subtract our
percentage of our account balance so if
we just lost one percent of our account
balance that would be one percent
multiplied by our account balance would
be subtracted
from our account balance that makes
sense next up we need to subtract our
total pips but instead of t entry minus
t target we want t entry minus t stop
and then we need to increment our total
loss not our total wins so now we're
tracking our balance total pips total
loss the final thing to do is to update
our drawdown so to do that all we need
to do is set our drawdown to our balance
divided by our maximum account balance
or our equity high
and then subtract one from that value
and that will give us our drawdown
percentage our current drawdown
percentage and finally we need to check
if our current drawdown is lower than
our max drawdown
then we want to override our max
drawdown with our current drawdown so
this will track our maximum drawdown
from our
maximum account gain so
every time we hit a new equity high as
soon as we encounter a losing streak
this will track our worst losing streak
over historical price action or losing
period it doesn't have to be a losing
streak and then now that's it basically
let me save the script to make sure we
have no errors
okay so everything is fine the last
thing we need to do is display this
information and to do that i use the new
pan script feature of tables so we can
use tables to display data onto our
charts now and this is how we do it
so
we need to prepare our stats table first
and to do that i use another persistent
variable var table so we're declaring a
new table and this table is just going
to be called test table since this is a
back testing display table
and i'm going to set this to table dot
new
and then we need to give it a couple of
arguments for this
table.new function
the first one is where we want to
display the table so i'm going to put my
table as
position dot and then here are all your
options so you could add a setting to
the settings menu if you wanted to and
the user could move this dis um this
display table anywhere on their chart
i'm just going to leave mine in the top
right hand corner for now but i
encourage you to play around with your
positions
especially if you prefer your
table to be displayed somewhere else
down on the bottom left is a good place
for it as well because it's outside of
price action
but i'm happy with having in the top
right so i'll leave it there for now the
next thing we need to do is specify how
many columns and rows we want in our
table now it's important that you
provide the correct
quantity of columns and rows if you
provide too few columns or rows and you
try to add data to those columns or rows
your script will not compile you'll get
an error so
you can have more columns than you use
but not fewer so for today's lesson
we're just going to go with five columns
and two rows so we'll have one two three
four five columns and two rows next up
we need to specify we don't need to but
we can specify our border width and i
just set mine to 1. this is the distance
between all of the cells in your table
next up i'm going to declare a custom
function this is going to be called f
underscore fill cell and this custom
function is going to take a handful of
arguments the first one is our whoops
table id that would be this variable
name so when we use this function later
we need to pass in our test table as our
first parameter the next thing we need
to do is specify which column we want to
update or which
column and row we want to fill the cell
on
the next one is our row
the next parameter
the next parameter is our title
and then
the value
that we want to display
then we have background color and text
color
and to declare or initialize a custom
function we need to use the equal and
then right arrow
operator then we need to indent or tab
below this function so that the pine
script knows that all the code under
this tab
falls within the scope of this function
and this function is going to be quite
simple the first thing i do is just i
declare my cell text
and this just combines the title without
value so this is going to say title
plus and then
a string here with a backslash and an n
so this is an escape character and this
means
new line so we have our title and then
on a new line we add our value and then
finally to wrap up this function we need
to use the table dot cell function to
fill
the given cell
on the given column and row with this
data so to do that we need to pass in
our table id
and then the column and the row we want
to update and then we need to specify
our
the text of the cell so we're just going
to pass cell text into there
then we need to specify our background
color that's going to be set to bg color
and then our text color is going to be
set to
text color now that should be okay let's
save the script make sure that that
compiles okay and no issues there
so now the final thing to do is to
draw our stats table
now the best practice for working with
tables is to check if we are on the last
bar
on our chart
so for this i use the
bar state dot is last confirmed history
so that would be this bar here
this is the last confirmed historical
bar in our chart on this bar our table
will be drawn onto the chart we don't
want the table drawing on every bar in
our chart because we're only going to
see
the latest update of the table so you
don't need to have this if statement in
your script but it will make your script
a little bit more efficient on the
trading view servers when it compiles
and when it runs
so it won't be updating your table on
every single bar on the chart
it'll only update the table once
on the final bar when it's
drawn onto our chart so keep that in
mind when working with tables
tradingview have said that it's best
practice to only update your table on
the very last historical bar or real
time bar now before we continue i do
like to specify a default background
color for my table
and then i override this default
background color if i need to
so that'll make sense in a moment but
for now i'm going to set my default
background color to color dot new
color dot black with a transparency of
zero percent so next up we also need to
check if the user has turned on or off
the
drawback tester setting in the settings
menu so i'm going to indent that if
statement there and i'm going to add
another one here that says if draw
tester
so if we have the draw tester turned on
and this is the last bar in our chart
then we want to draw our table or update
our table with
our back tested data so update table
before we start filling our data we need
to calculate our dollar return
so that's going to be set to
our current balance minus our starting
balance
so this will tell us how much um
how much of a dollar return we've made
and now we need to use our custom fill
cell function to fill all of the cells
on our table that we created remember we
have five columns two rows
so to do this we need to call fill cell
we need to pass in our test table id
that's this guy here
we need to specify a column and a row so
the first cell on our table is going to
be 0 0 and then 0 1 and then 1 0 1 1 etc
you'll see in a moment how that works
then we need to specify our title so the
title for our first cell is going to be
our total trades
and then we need to specify a value
so for this i'm going to use the
tostring function so 2 string
because remember we're adding
this value parameter
to
a string
so we need to convert any numbers we
want to display
in our table to a string using the
inbuilt tostring function
so for this i'm just going to say
strategy dot closed trades
this will get how many
trades have been confirmed or like how
many trades have won and lost
over our historical price data
then we need to specify our background
color i'm going to just leave this as
our default black
background color
and then we need to specify a text color
and for
most of our cells it's just going to be
color.white
so let's save this script and see what
happens we should now be getting total
trades drawn in the top right hand
corner once the script compiles
there we have it
perfect so now all we need to do is fill
out our table with all of this data here
and so to do that i'm going to copy this
line of code and paste it in a couple of
times
now i'll explain the row and column
thing here so for this we're we're
updating the zero or first column and
the first row of our chart
next up we want to
update the first column but second row
of our chart remember everything in
programming starts from zero so zero is
the first one is the second
and then next up we want to update the
second column
and the sec first row and first
first row and second column so this is
just going to be 0 0 0 1 1 0 1 1 2 0 2 1
etc
until we've filled out our entire table
so the next thing i display here is our
win rate and to calculate that we just
divide our strategy.win trades
oops
by our strategy
dot
closed trades and then we need to
multiply this
by 100 to convert this into a percentage
and then i want to add
the percentage sign to the end of this
number
and then we can leave our default
background color and text color next up
we have our
starting account balance so for this i'm
going to start with a dollar sign and
then add on our
start balance
and then we have our
ending balance and then same thing here
dollar sign plus
our
balance
so let's save the script and see if we
get our new cells updated and there we
go
but you can see that we have a lot of
decimal places here that is not ideal
for displaying this information so we
are going to use the truncate function
that we created
when i
showed you how to create this hammers
and star strategy script there should be
a truncate function here
which cuts
the excess decimal places off any given
number
so first we have our win rate with too
many decimals so here we'll just say
truncate
this number to two decimal places and
then we also have our ending balance
which needs to be changed so here we can
just say truncate our balance
to two decimal places now if i save the
script these numbers should look a lot
more readable not quite i need to put
this
comma two within these parentheses now
that should work all right now that's
fixed we have our decimal places being
truncated to just two digits
it looks a lot better much easier to
read
so we only have a few more things to add
here
that is our return as a dollar amount
our total pips
our return is a
percentage
and our max drawdown
so i'm going to copy all four of these
lines paste them in here and change this
to two two three three
and these can stay zero one zero one and
now our next
display variable is going to be returned
the one after that is
pips
the one after that is
return again
and the one after that is max drawdown
so our first return is going to be a
dollar amount
so for this we're just going to
truncate
our
dollar
return to two decimal places
and then we're going to change the
background color based on whether we
made money or lost money
so for that we just check dollar return
greater than zero question mark if so
set it to color.green
otherwise set it to color.red
next up we have our total pips so let me
get rid of
all of these so that's not confusing
so our total pips
um the first thing we're going to check
is do we have a positive number here so
is total pips greater than zero question
mark if so then we want to add a plus
sign in front of
this value otherwise we just want to add
nothing because if it's a negative
number it will have a negative
sign in front of it it will have the
minus sign in front of it and i need to
put this into parentheses
and then i need to add on our total pips
truncated to two decimal places so total
pips my comma two and we're done there
next up we have our return as a
percentage so i'm going to do the same
thing here as we just did for our total
pips i'm going to say is dollar return
greater than zero question mark then add
a plus sign otherwise add nothing and
now we need to do similar math to our
win rate we need to divide our dollar
return by our start balance and then we
need to truncate that number to two
decimal places so truncate
our dollar return divided by our start
balance
multiply by 100 and truncated to two
decimal places and then i'm also going
to change the background color of this
cell based on whether we made money or
lost money so paste that code in there
if we made money it'll be green if we
lost money it will be red
finally we have our max drawdown this
one is easy again we need to truncate
the number of those we'll get a million
decimal places for whatever reason so
truncate our max drawdown
multiply by 100 and truncated to two
decimal places and for our max drawdown
we want to set the color to red so that
it's always red
i think that just makes it more
intuitive to read
this tester table
so
finally
we should be done here if i save the
script hopefully we don't get any errors
and
i spoke too soon
i've got my parentheses all mixed up
here so i need to add parentheses around
this value here and then add another
parenthesis on the end of that so if i
say the script
there we go now it's working fine we
should have everything drawing in the
top right hand corner here there we go
perfect now there are a couple of things
i messed up here we need to add a
percentage sign on the end of our return
here and we need to add one on the end
of our max drawdown so let's get rid of
that dollar sign there
and add on a percentage sign and then
same for our return we need to add on a
percentage sign on the end there and
also our total pips we need to convert
to a whole number so i'm going to use
the
two-hole function that we created when i
showed you how to
create this script in the previous
lesson again a link will be in the video
description
we're using this function to convert our
pips into whole numbers
so let's save this script and see if
everything is working okay and there we
go finally
we have our back chester display drawing
properly we have our total trades let me
open up the strategy tester system here
you can see that our win rate is the
same as this
our total trades is the same as this
our starting balance was ten thousand
dollars our ending balance was fourteen
thousand dollars which is a return of
four thousand dollars or forty percent
we ended with eight thousand eight
hundred pips
this is a daily chart strategy so each
trade that we win is usually over a
hundred pips so that's not an unusual
number to see even though it's quite
high
being a daily chart strategy
these results
are over several years of data so i
believe from 2005
until
now no here we go 2005. so january 2005
is when our script began taking trades
because for whatever reason on orlando
there are no wicks
prior to 2005 and this being a hammers
and stars strategy requires wicks in
order to detect hammers and stars so it
doesn't start trading until the 1st of
january 2005
and this was the theoretical result of
this strategy over that time period now
i say theoretical because obviously it
doesn't take into account slippage
missed trades trades that nearly won but
then turn into losing
trade because of spread and your profit
target wasn't filled
or
price coming really close to your stop
loss stopping you out by the spread and
then continuing on to hit the profit
target the trading view tester is not
smart enough to
understand or accommodate
account for that information so this
information should only be taken as a
very rough guide the way i personally
use it in my own trading is
i will just cycle through
these markets
and check what its return and max
drawdown was and its win rate
and based on whatever risk reward
profile i'm using if i see numbers here
that look promising then i will go back
and manually back test the data to
confirm that there weren't too many
trades that were questionable
and by that i mean any trades that came
very close to the stop-loss but didn't
quite hit it and wasn't counted as a
losing trade in the tester system i
would manually count that as a losing
trade and vice versa any trade that came
down and touched my take profit but not
i didn't exceed it by my average spread
on this market i would exclude that as a
losing trade if the price went on
to reverse and hit my stop loss
little things like that and i did do a
video recently on the limitations of the
trading view strategy tester system so
if this is something that is new to you
and you weren't aware that the strategy
tester
isn't as accurate as we might hope as
traders make sure to go and watch that
video because it is very important that
you are
informed about the limitations of the
training view back tester system
anyway with that said
that pretty much wraps up this lesson
just before we end let's play around
with some of these settings so let's
change our start balance to one hundred
thousand dollars
um it doesn't change anything other than
our return dollar amount and our ending
amount
let's try changing our risk reward let's
try let's try two percent risk that
should double our max draw down and our
return
and so everything seems to be working
fine so you should be able to
copy and paste
this entire block of code into any
script any strategy script
the only thing you'll need to track is
your
trade entry and trade target apart from
that
and you can do that using var variables
and whenever your script enters a trade
make sure to save your entry price and
save your target price and your stock
price and then this code should work
just fine so long as you update the t
entry t target and t stop to whatever
you call it in your script
and don't forget to add
the
backtester settings to your script as
well the user input anyway that'll do it
for today's lesson uh this went on a
little longer than i anticipated i
wanted to try and keep this lesson short
but uh it's quite hard to do as i'm sure
you've noticed if you've been following
any of my lessons
it's quite hard to explain these
concepts in
a really short quick and concise manner
but i hope you found this interesting i
hope you found this valuable in your
trading
um it's quite a cool feature i've been
going back and adding this to all of my
scripts you can also add this to
indicator scripts like i showed you
earlier with my ultimate pullback
indicator
this is a study script if i open up the
source code here this is a study it is
not a strategy script but it is still
displaying the same information the only
difference with this obviously is that i
had to
track
um how many trades hit their profit
target how many trades hit their stop
loss
and so on basically i had to recreate
the tradingview backtester system
in custom code to simulate the same
thing that the backtester system does
which if your experience with pinescript
isn't too difficult you just need to use
a lot of var variables and track
when candles hit your stop loss or take
profit
and then you can create all kinds of
cool things here like for example if i
want to change my
risk reward to two to one and my break
even at one to one so when price hits a
one-to-one
target my stop-loss comes down to break
even
and you can see that my break-even rate
is being tracked here by the script as
well so there are a lot of cool things
you can track with this code and display
onto the chart for your self or for
people who use your script
and anyway i think that'll do it for
today's lesson before i go make sure to
check out panscriptmastery.com if you
want to learn more detailed in-depth
lessons and tutorials on how to use pine
script to its fullest potential i also
have my indicators course over there
where you can get the source code to
this script this ultimate pullback
indicator
and all of my other scripts every script
i've ever written and there are dozens
or over two dozen
advanced scripts in that course where
you get the source code and lessons
explaining why i did what i did and how
i did what i did
if you're just a trader and you want to
use the ultimate pullback indicator in
your own trading which also by the way
includes full automation capabilities
using pine connector
and autoview then you can sign up for a
free trial to this indicator over on
that same website
pinescriptmastery.com
um check out the artoftrading.com for
all of my other
social media and extra resources lessons
my blog all of that stuff and with all
that said i'll leave it there thanks for
watching see in the next video take care