Understanding Results
After running a backtest, Quantlens shows you a rich set of charts and metrics. This page explains what each number means — in plain English.
Equity Curve
The equity curve shows the growth (or decline) of your starting capital over time.
A steadily rising curve = consistently profitable strategy.
Flat sections = no trades / neutral market conditions.
Sharp drops = losing streaks or large individual losses.
Tip
A smooth, gradually rising curve is generally better than a curve that shoots up quickly but has violent swings — it suggests the strategy is robust rather than lucky.
Key Metrics
Metric |
What it means |
|---|---|
Total Return (%) |
Percentage gain/loss over the entire test period. |
Annualised Return (%) |
What the return would be if scaled to 1 year. Useful for comparing strategies of different lengths. |
Sharpe Ratio |
Return per unit of risk. Above |
Sortino Ratio |
Like Sharpe, but only penalises downside volatility. Better for asymmetric strategies. |
Max Drawdown (%) |
Largest peak-to-trough decline. A drawdown of |
Win Rate (%) |
Percentage of trades that were profitable. |
Profit Factor |
Total gross profit ÷ total gross loss. Above |
Avg Trade (USD) |
Average profit or loss per trade after commissions. |
# Trades |
Total number of trades executed during the test period. |
Interpreting Sharpe Ratio
Sharpe |
Interpretation |
|---|---|
< 0 |
Strategy loses money risk-adjusted — avoid. |
0 – 1 |
Positive but weak. Likely not worth trading live. |
1 – 2 |
Acceptable. May be worth further investigation. |
> 2 |
Strong risk-adjusted performance. |
> 3 |
Exceptional — double-check for overfitting. |
Interpreting Max Drawdown
Max Drawdown tells you the worst losing streak you would have endured.
For example, if your strategy has a Max Drawdown of -35% and you start with $10,000, there would have been a point where your account was worth only $6,500 — before recovering.
Warning
Most traders underestimate how psychologically difficult it is to hold through a 30–40% drawdown. A strategy with a lower drawdown is often preferable even if its total return is slightly lower.
PDF Tearsheet
Click Export PDF to download a formatted tearsheet containing:
Equity curve chart
Monthly returns heatmap
Full metrics table
Trade log summary
This is useful for sharing with investors or for your own records.