Free Software Options for Backtesting Trading Strategies

Backtesting is an essential step in developing and refining trading strategies before deploying them in real markets. While there are specialized software packages designed for this purpose, there are also several free tools available that can take your backtesting process to the next level. Here, we will explore some of the best free and low-cost options that cater to a variety of traders' needs.

Streak by Zerodha

One of the standout free options is Streak, a backtesting tool provided by Zerodha. Streak allows you to test your trading strategies using historical market data. This platform is particularly compelling for those already using Zerodha for their trading needs, as it integrates seamlessly with their brokerage platform. You can access Streak through the following link:

Zerodha Streak

Additionally, Streak can be logged into if you have an account with the following broking firms:

FactorPad Fyers

With Streak, you can test your strategies on various asset classes, including equities, forex, options, futures, cryptos, and CFDs. This makes it an all-encompassing tool for traders looking to manage their portfolio across different asset classes in a single platform.

QuantConnect

For those who prefer a more comprehensive platform, QuantConnect offers a superb solution. Their trading engine, LEAN, is a powerful tool that supports backtesting for equities, forex, options, futures, cryptos, and CFD assets. LEAN allows you to:

Automatically track portfolio performance, profit and loss, and holdings Trade on all six asset classes simultaneously from a central portfolio Test and refine trading strategies across multiple margin models

What sets QuantConnect apart is its active community and support. The platform's rich ecosystem of tutorials, forums, and webinars makes it easy for beginners to get started, while advanced traders can benefit from the extensive resources available.

Python Backtesting Libraries

For programmers and data enthusiasts, there are several Python packages available for free that can be used for backtesting trading strategies. While the specific names may vary, popular options include:

: A simple tool for backtesting your trading strategies using the stable version of Python's pandas. Backtrader: A robust library for backtesting and live trading, with a wide range of features and customization options. Cerebro: Part of the Backtrader framework, Cerebro is an intuitive and user-friendly backtesting engine that allows for easy integration with other libraries.

These Python libraries provide comprehensive tools for data analysis, trading strategy implementation, and backtesting. They are particularly useful for those who are comfortable with Python and looking to implement custom strategies.

AmiBroker (Trial Version)

AmiBroker is a highly regarded commercial backtesting tool, and the software offers trial versions with either limited time or limited features. Despite the cost, AmiBroker is extensively supported by an active community and offers advanced features such as:

Advanced charting capabilities and analysis tools Support for a wide range of trading data sources Data normalization and merging capabilities

While a trial version may not provide full access, it still allows users to explore and test trading strategies. Given the support and features available, investing in a trial version can be extremely worthwhile.

Thinkorswim with TD Ameritrade

For those on a limited budget, Thinkorswim offers the ability to backtest strategies with a small amount of money in your account. This platform provides a range of tools for backtesting, including a comprehensive suite of charting, analysis, and trading features. Here's how you can access Thinkorswim:

TD Ameritrade Thinkorswim

Thinkorswim is a powerful tool that is worth considering if you are looking for a free trial with basic backtesting capabilities. Its robust features make it a valuable resource for traders who are just starting to explore backtesting.

In conclusion, there are several free and low-cost options available for backtesting trading strategies. Whether you prefer a dedicated platform like Zerodha's Streak, the comprehensive ecosystem of QuantConnect, the flexibility of Python libraries, or the advanced features of Thinkorswim, there is something to suit every trader's needs. Each of these tools offers unique advantages, so it's worth exploring them to find the best fit for your trading strategy.