Introduction: What Is Solana?
Solana is a high-performance blockchain platform known for its speed, scalability, and low transaction costs. Built to support decentralized applications (dApps) and smart contracts, Solana can process tens of thousands of transactions per second, making it one of the fastest and most efficient blockchains in the world. Its native token, SOL, is widely used for staking, transaction fees, and decentralized finance (DeFi) applications.
In the fast-moving world of crypto trading, Solana’s volatility presents both opportunities and risks. That’s why traders increasingly rely on backtesting strategies — to analyze how a trading system would have performed on historical SOL data before risking real funds.
Why Backtest a Solana Trading Strategy?
Backtesting is essential for any systematic trading approach. It allows traders to:
- Evaluate performance: Understand how a strategy would have performed historically.
- Measure risk: Identify potential drawdowns and volatility exposure.
- Optimize parameters: Fine-tune moving averages, stop losses, or take-profit levels.
- Compare setups: Test different models — from simple momentum systems to AI-driven algorithms.
For Solana, which often experiences rapid price swings, a backtest can reveal whether your model can handle volatility or if it’s prone to overfitting.
The strategy was based on moving average crossovers (SMA/EMA) combined with stop-loss (SL) and take-profit (TP) levels.
Test Setup:
- Data timeframe: 1-hour candles (OHLCV data)
- Parameters tested:
- Short moving average (n1): 5–100
- Long moving average (n2): 100–200
- Stop-loss: 1–5% (fraction of entry price)
- Take-profit: 2–10% (fraction of entry price)
- Initial capital: 1,000 USD equivalent
- Commission: 0.2% per trade
- Trade direction: Long-only (buy/sell)
Each combination of parameters was tested to determine how different configurations affect performance and stability.
Performance Metrics
For every backtest, the following statistics were recorded:
- Total Return (%) – overall profit or loss from all trades
- Win Rate (%) – percentage of profitable trades
- Max Drawdown (%) – largest equity drop from peak to trough
- Sharpe Ratio – risk-adjusted performance indicator
- Number of Trades – how active the strategy is
These results help identify which parameter sets perform consistently and which are overfitted or too sensitive to market noise.
Start 2025-01-01 00:00:00
End 2025-10-23 18:00:00
Duration 295 days 18:00:00
Exposure Time [%] 12.98774
Equity Final [$] 1586.11936
Equity Peak [$] 1753.35365
Commissions [$] 194.50264
Return [%] 58.61194
Buy & Hold Return [%] -10.83105
Return (Ann.) [%] 76.61833
Volatility (Ann.) [%] 50.36552
CAGR [%] 76.70328
Sharpe Ratio 1.52125
Sortino Ratio 5.513
Calmar Ratio 7.68159
Alpha [%] 59.62038
Beta 0.09311
Max. Drawdown [%] -9.97428
Avg. Drawdown [%] -2.31364
Max. Drawdown Duration 65 days 04:00:00
Avg. Drawdown Duration 4 days 13:00:00
# Trades 38
Win Rate [%] 39.47368
Best Trade [%] 7.584
Worst Trade [%] -2.396
Avg. Trade [%] 1.32545
Max. Trade Duration 4 days 08:00:00
Avg. Trade Duration 1 days 00:00:00
Profit Factor 1.99081
Expectancy [%] 1.43689
SQN 1.57227
Kelly Criterion 0.17606
