Glossary
Definitions for common backtesting and Pine Script terms.
B
- Backtest
- Running a trading strategy against historical market data to evaluate its performance.
- Buy and Hold
- A benchmark strategy of buying an asset at the start and holding it for the entire backtest period.
C
- Candlestick
- A price bar showing the open, high, low, and close (OHLC) values for a specific time period.
D
- Drawdown
- The peak-to-trough decline in portfolio value during a backtest, often expressed as a percentage.
E
- Equity Curve
- A chart showing how a strategy's portfolio value changes over time during a backtest.
O
- Overfitting
- When a strategy is tuned to match historical noise rather than a genuine market pattern.
P
- Parameter Sweep
- Testing a strategy across a range of input values to compare how performance varies with different settings.
- Pine Script
- A domain-specific programming language created by TradingView for writing trading indicators and strategies.
W
- Win Rate
- The percentage of trades in a backtest that were profitable.