Quantwala field notes · 5 minute read
Backtest an Indian stock idea. Read the evidence.
A practical guide to testing Indian stock strategies: write a rule, include trading charges, inspect drawdowns and try three example prompts in Quantwala.
For Indian equity researchers and first-time strategy builders. Published 5 October 2026.
Start with a rule you can actually test.
A backtest applies written rules to historical market data. It helps you inspect how an idea behaved under a chosen set of assumptions. It cannot show what you will earn next month.
Specify the stock, timeframe, date range, entry rule, exit rule and position size. “Buy when the market looks strong” is ambiguous. A crossover or a completed-bar breakout is much easier to check.
- Describe the rule. Write your idea in plain language in Quantwala’s chat.
- Review the interpretation. Check the strategy, available historical coverage and assumptions before judging the result.
- Inspect the evidence. Read the equity curve, drawdown and individual trades, with estimated charges included.
Three examples you can change.
These are testing exercises, not stock recommendations or proven strategies. Choose your dates and assumptions before running them.
Trend idea
Backtest a 20-day and 50-day moving-average crossover on RELIANCE daily bars. Buy when the 20-day average crosses above the 50-day average, and exit on the opposite cross. Use a long-only position and include Indian trading charges.
Mean-reversion idea
Test a long-only RSI idea on INFY daily bars: enter when RSI(14) falls below 30, exit when it rises above 50, and include trading charges. Show the trades and drawdown.
Breakout idea
Test a long-only 20-day breakout on TCS daily bars. Enter when the close exceeds the highest high of the previous 20 completed bars, exit below the lowest low of the previous 10 completed bars, and include trading charges.
A good-looking curve needs a second look.
- Timing: could the signal have been known before the simulated fill? A completed candle does not justify an earlier entry.
- Costs: compare gross and net P&L. Frequent trades can make charges significant; inspect the free charges calculator.
- Drawdown: examine the depth and length of losing periods, not only the final return.
- Sample size: a handful of trades is weak evidence. Check different periods rather than tuning only to the best one.
- Execution: historical fills are estimates. Slippage, liquidity and real execution can differ.
Keep a period you did not use to design the rule for a separate check. Avoid repeatedly changing parameters until one curve looks attractive.
Try your first written rule.
Backtest an idea, 7 days free7-day trial. No card required. Educational research and paper trading only.
Next: paper trading in India · See the methodology in action