How to Backtest Your Portfolio with Shrimpy and Build Successful Trading Strategies

Lulian Lesanu • February 18, 2022

Shrimpy is one of the most efficient tools in automated portfolio management. All traders, regardless of experience, can use it to get the best out of their trading strategy. And with the backtest option, you can estimate how your portfolio would perform in different circumstances.



Backtesting enables customers to determine how a strategy would have performed over time. This way, they can anticipate how a specific approach would pan out. Shrimpy offers easy and effective backtesting with real-time results for you to tweak your portfolio automations for the best results.


Here are some of the Shrimpy options available with the Backtest tab! 


Asset Selection

This feature lets you pick which assets you wish to include in the backtesting strategy. Remember that the assets you select must occupy more than 0% allocation. The sum of the assets' allocations has to reach exactly 100% for the backtest to run.


Backtest Configuration

From the “Backtest Settings” tab, you can configure your rebalance strategy and trading fee. Remember that you can only evaluate one rebalancing strategy at a time.


Trading Fee

This setting enables you to calculate the amount of fees you would pay for each executed trade during the backtest.


Rebalance Period

You can use this feature to indicate how frequently rebalance execution should re-align your portfolio to target allocations. Notice that this frequency can range from 1 hour to a year or more.


Rebalance Threshold

Additionally, you can choose the rebalance threshold specifying when the portfolio rebalances must occur to re-align itself to target allocations. This threshold depends on the deviation each asset has from its target allocation.


Fee Optimization

One of the best parts about using Shrimpy is that you can simulate how the tool would work beforehand. For instance, this feature allows you to see how your strategy would work whether you enable “Fee Optimization” or not. You may be familiar with this option if you already know how to automate your portfolio with Shrimpy.


Backtest Results

Shrimpy allows you to see the backtest's results when selecting "Run." This way, you can detect important details about your strategy from the start. This information includes the population of the main graph along with other statistics. Together they can indicate how well rebalancing performed compared to holding the same assets.


Shrimpy Final

This feature shows you the funds you would have had after backtesting if you rebalanced using the portfolio allocations. Also, the results depend on the rebalancing settings you defined in the backtest. 


Holding Final

This sum represents the funds you would have had after backtesting if you didn’t execute any rebalances during the period. Also, it shows what would have happened if you had held the same assets in a portfolio that didn’t rebalance.


Difference

This figure represents the amount that Shrimpy Final performed compared to Holding Final. This sum can be worse or better than the Holding Final.


Copy Portfolio

You can add the portfolio you have backtested into your “Automation” tab by selecting “Copy Portfolio.”

There you have it! Now you can quickly backtest your portfolio while altering the options above according to your strategy. When you find a potentially winning one, you can add it to your automations. 


Many social leaders on Shrimpy help investors maximize profits from crypto trading. Use this feature to better understand how your assets would perform in various circumstances. Lastly, always do your due diligence before repurposing your portfolio.

You can try using Shrimpy as a demo here.


Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. None of the content on Crypto Folds is investment advice nor is it a replacement for advice from a certified financial planner. Please do your own research before purchasing or investing into any cryptocurrency.  
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