The Basic Strategies tab is the starting point. Four classic rule families — Mean Reversion, Momentum, Crossover, Breakout — each isolated into its own module so the indicator choices and outputs stay focused. If you are new to strategy backtesting, start here before moving to Indicator Strategies.
What lives in this tab
Every family follows the same three-tool pattern:
- Scanner — Ranks an entire index (S&P 500, NASDAQ 100, FTSE 100, DAX, CAC 40, Euro STOXX 50, Nikkei 225, Hang Seng) by how well each ticker fits the family. Mean Reversion ranks by Hurst / Variance Ratio / Half-Life; Momentum by trend persistence and ADX; Crossover by moving-average separation; Breakout by Bollinger/Keltner squeeze.
- Signal Overlay — A single-ticker chart that overlays buy/sell signals for one indicator at a time. Intentionally hides the last 30% of bars so you don't unconsciously curve-fit to data you've already seen.
- Strategy Builder — The full backtest: entry rule, optional confirmation rule, exit rule, direction (long/short), stop-loss and take-profit. Produces trade table, win rate, drawdown, Sharpe and a buy-and-hold comparison chart.
Scanner presets appear directly in the Basic Strategies ribbon: "Mean Reversion S&P 500 Hurst Filter", "Momentum S&P 500 Scanner", "Crossover S&P 500 ADX Filter", "Breakout S&P 500 Squeeze Filter". Each is a one-click entry to the scanner with its parameters pre-set.
Canonical workflow
- Pick a family based on the market you think you're in: range-bound names → Mean Reversion; strongly trending → Momentum or Crossover; compression followed by an expected move → Breakout.
- Run the Scanner for that family against your chosen index. Sort the composite-score column. The top 10–20 results are your working universe.
- Open Signal Overlay for one of the top tickers. Flip through indicators in the family to see which one's signals line up with past moves. This is where you develop intuition about what the family actually looks like on your specific name.
- Move to Strategy Builder with the same ticker and the indicator that looked best. Configure entry, a confirmation if you need one, an exit rule, and the risk parameters.
- Run the backtest. Read the trade table first (are the trades reasonable in count and hold time?), then the summary metrics, then the equity curve vs. buy-and-hold.
- Save the config. It lands in the Execution ribbon. From there it can be forward-tested in Indicator Strategy Paper Trading (PT003MRSB) against live market data.
Basic Strategies constrains you to one family at a time with a focused indicator menu. That's the point. Learning how a Mean Reversion strategy is supposed to behave on the equity curve is much easier when the module only offers you mean-reversion tools. Once you can recognise good and bad output here, the Overlay/Builder in the Indicator Strategies tab becomes much less overwhelming.
Reading the outputs
- Scanner composite score — A family-specific weighted score. Higher is better fit. Use it to rank, not as an absolute threshold.
- Signal Overlay chart — Green arrows are entries, red are exits. The 30% holdout on the right edge is deliberate — you're looking at the rule's decisions, not at pattern recognition.
- Backtest metrics — Win rate alone is misleading; pair it with average-gain / average-loss. A 40% win rate with 3:1 payoff beats a 60% win rate with 1:2 payoff.
- Equity curve vs buy-and-hold — Any strategy that underperforms buy-and-hold with higher drawdown is not worth deploying. A strategy that matches buy-and-hold's return with materially lower drawdown usually is.
Common pitfalls
- Fighting the family. Running a mean-reversion rule on a trending name and "fixing" it with a tight stop produces the classic pattern of lots of small losses and one giant loss.
- Over-tuning the Strategy Builder parameters. The Strategy Builder doesn't have an out-of-sample split — if you sweep parameters until the backtest looks perfect, you've overfitted. If you're sweeping parameters seriously, move to Indicator Strategies → Overlay/Builder, which has an IS/OOS split.
- Trusting Signal Overlay as a backtest. The overlay is a visual exploration tool; its performance numbers cover all bars including the holdout, but the feedback loop of adjusting until the chart looks clean is still curve-fitting. Use it to form a hypothesis, then test the hypothesis in Strategy Builder.
Deeper reading
- Trading Strategies → Mean Reversion Overview and Momentum Overview for the hypotheses behind each family.
- Trading Strategies → Platform Workflow articles under each family for indicator-level guidance.
- Platform Guides → Indicator Strategies Workflow when you've outgrown the one-family-at-a-time constraint.