How to Backtest and Validate Trading Strategies Using AI
This guide shows you how to run accurate, no-code backtests using Fiscal.ai and Capitalise.ai - plus how to validate the results.
🔎 Backtest Your Trading Strategy in Minutes - Using Verified AI Tools
No code, no spreadsheets. Here’s how to run - and validate - your trading strategy using real AI tools in under 5 minutes.
✍️ Editor’s Note
Backtesting is no longer reserved for quants and coders. In this issue, we break down how to run and validate your own trading strategies using AI - with no technical skills required.
⚙️ How to Backtest Your Trading Strategy (No Code Needed)
Most traders rely on gut feeling. But with today’s AI tools, you can backtest your ideas against real historical data - no spreadsheets, no Python, no guesswork.
In this issue:
2 verified no-code AI tools
A hands-on prompt workflow
A framework to validate every result before acting on it
🛠️ Tool #1: FinChat.io (now Fiscal.ai)
Fiscal.ai is an AI-powered research assistant trained on SEC filings, financial metrics, and institutional datasets. You can ask it to analyze a strategy, test assumptions, or compare performance to benchmarks.
🔧 Try this prompt:
“Backtest this strategy on S&P 500 stocks from 2018 to 2024: Buy when 50-day MA crosses above 200-day and RSI is below 40. Sell when RSI is above 70. Return CAGR, win rate, max drawdown, and average hold time.”
🧠 Follow up with:
“Which tickers performed best under this logic?”
“How would this perform with RSI < 30 instead?”
“Compare to a buy-and-hold SPY return.”
URL: https://fiscal.ai
🧪 Tool #2: Capitalise.ai
Capitalise.ai lets you write natural-language trading rules like “IF price > 50MA AND RSI < 40 THEN buy” and instantly backtest them using real historical data.
📊 What you’ll see:
Total return
Sharpe ratio
Max drawdown
Trade-by-trade log (including timestamps and price)
You can even set alerts or automate live strategies - without writing a single line of code.
🧠 Real-Time Experiment
Try this today in either platform:
“Backtest a 50/200 MA crossover strategy on TSLA from 2019–2024. Return CAGR, win rate, drawdown, and compare to SPY.”
Then ask:
“Now isolate only bull market months when SPY’s 3-month return > 0.”
You’ll see how market context affects performance - no theory, just hard data.
✅ How to Validate AI-Generated Results
Before you trust any backtest, ask these:
1. Where’s the data from?
Ask the tool:
“What data source and timeframe are you using?”
“What’s the default period for RSI or MA?”
2. Can I cross-check it?
Take the same logic to:
TradingView with built-in backtesting
Portfolio Visualizer
If the outcomes align, your AI result is likely reliable.
3. Can I see the trade log?
In Capitalise.ai, download the trades and check:
Entry/exit timing
Consistency with your logic
Whether slippage and fees are included
4. Did I overfit?
Avoid strategies that only work in one period. Ask the AI to rerun using:
“Out-of-sample backtest from 2023-2024 only.”
🔍 Common Backtest Mistakes (And How to Avoid Them)
🚫 Over-Optimizing - Stick to a few clear rules; more filters = more curve-fitting.
🚫 Ignoring Slippage - Confirm if the platform includes friction (spread, fees, etc.).
🚫 Short Timeframes - Always test at least one full bull–bear cycle.
🚫 Not Validating with Secondary Sources - Never rely on one tool alone.
💬 Final Word
AI makes backtesting faster - but you make it smarter.
When you pair powerful tools with validation and skepticism, you gain clarity that most retail traders never achieve.
Vaulting Your Wealth Forward,
– T. D. Thompson
AI Investing Vault
The content above is for educational and informational purposes only and does not constitute financial advice or a solicitation to buy or sell any financial instruments. Trading and investing involve significant risk of loss, and past performance is not indicative of future results. Always consult with a licensed financial advisor or conduct your own research before making any investment decisions. Use of AI tools and strategies mentioned above is at your own discretion and risk. AI Investing Vault may receive compensation if you purchase tools or services mentioned in this email, at no additional cost to you.