What Is Backtesting?
Backtesting simulates a trading strategy on historical price data. Instead of waiting weeks or months for real results, you can see in seconds how a strategy would have performed in the past. It's the most important tool for evaluating strategies before you activate them.
What Software Do We Use?
BotTrade.app uses Freqtrade — an open-source trading bot software developed by an active community (freqtrade.io). Freqtrade is used by thousands of traders worldwide and is one of the most well-known open-source trading bots.
What Data Do We Use?
All backtests are based on historical OHLCV data (Open, High, Low, Close, Volume) . These are real historical price data — not artificial or delayed. Available time periods range from 1 month to 1 year, on timeframes from 1 minute to 1 day.
Which Fees Are Included?
Freqtrade automatically calculates standard spot fees of 0.1% per trade — matching the standard spot rate. For each trade, both entry (buy) and exit (sell) are charged 0.1% each.
With 100 trades, that means 0.2% fees per roundtrip, totaling 20% of all trades as fee overhead. It sounds like little per trade, but adds up significantly with active strategies that generate many trades.
What's NOT Included?
Three important cost factors are missing from standard backtests:
Slippage: In reality, you rarely buy at exactly the displayed price. Especially during fast price movements or with illiquid pairs, the actual execution price deviates. We estimate approximately 0.05% slippage per roundtrip for Top 10 pairs.
Funding Rates: When trading with leverage, funding rates are charged every 8 hours — averaging 0.01% (exchange average 2024/2025). For a leveraged trade running several days, these costs can add up.
Market Impact: Large orders can move the price. At typical paper trading wallet sizes (1,000-100,000 USDT) and Top 10 pairs, this effect is minimal, but relevant for exotic pairs or very large positions.
Our Fee Simulator
For a more realistic picture, we've integrated a fee simulator into the backtesting results. Toggle it on and you'll see how slippage and funding rates affect the outcome.
Why Paper Trading Is the First Step
Backtesting shows the past — not the future. Markets change, volatility fluctuates, and a strategy that was profitable for 6 months can produce losses the next month.
That's why paper trading is so important: Your bot trades with virtual funds on real live market data. You see in real time whether the strategy works under current conditions — without risking real money.
Our tip: Backtest first, then activate in paper trading, and observe for at least 2-4 weeks before making decisions.
Honesty Builds Trust
We could hide the limitations of our backtesting. But we believe informed users make better decisions. That's why we transparently show what's included in our results and what's not.
Test your strategies with professional backtesting — and use the fee simulator for more realistic results.