Screening & Backtesting / 4 / Create a Strategy to Test Your Signal

ℹ️ Clicking on image thumbnails below enlarges all screenshots.

Steps Shown in the Video

  1. Open the exact same screener with the 3 filters as before (Guide 3 - Signal Trace, see example below).

  2. This time, filter the Ticker column to only SPY (so only SPY can ever be selected as part of the portfolio).

  3. Click Launch Backtest → choose Launch Strategy (not Signal Trace); if Launch Backtest is greyed out (like in the screenshot below, move the date to November 5 2025 for instance, when all conditions were met and click Launch Backtest

If SPY did not meet conditions on the last close date, it will not show up. Navigate to a date where all conditions were met (like Nov 5 2025) and Launch the Strategy Backtest.

Strategy settings:

  • Universe Mode: Static (because we forced only SPY on the Ticker column)

  • Weighting: Equal Weight

  • Minimum holdings: 1 → If SPY passes the screener → 100% SPY → If SPY fails → 100% cash

  • Replace Position Value with Cash

  • Rebalance frequency: Calendar-based → Every 1 day (daily check)

  • Name: SPY – Buying Regime Strategy (1Y)

  • Date range: Last 1 year

  • Click Confirm and Launch

Result: An equity curve that is in SPY only when the buying regime is on, flat (cash) when it’s off.

Combine Everything in One Market Study (Overlay Strategy + Signal + SPY)

  1. Open the Signal Trace Market Study you created in Part 3 (the clean buying regime).

  2. Click “+ New Tab” → name it Strategy

  3. In this new tab:

    • Click Import Strategy → search for the strategy you just created (SPY – Buying Regime Strategy) → Import

    • This imports the equity curve + daily rebalance shading

    • Optionally, remove the shading, as it’s unnecessary here

Add the Signal from the Signal Trace:

  • Click + Add Series → Backtests → find your Signal Trace (Buying Regime) → add the Final Signal → color bright green

  • Change scale to Percentage (so everything compares fairly) via the Configure Chart menu

  • Add SPY for comparison

  • Turn down opacity of the green regime slightly so the equity curve is visible

  • Zoom into drawdown periods to see how the strategy went flat and avoided the crash

You now have the exact same professional-looking market study shown at the end of the video:

  • Equity curve of the strategy

  • Green zones or entry arrows exactly where the regime was on

  • SPY price for comparison

  • Clear visual proof that the strategy avoided the big drawdown at the cost of some upside

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