Disclaimer:

This guide is for educational purposes only. It is not financial advice. Trading involves risk, and past performance does not guarantee future results. Always evaluate your own risk tolerance before running automated strategies.

Understanding Minimum Margin Requirements & Execution Stats in Your Backtest Report

When evaluating a trading strategy or strategy pack, knowing whether your account balance can handle the strategy's historical risk is crucial. To help you trade safely, your Backtest Report includes a Margin and Execution tab.

This guide explains how we calculate your minimum margin requirements, how to interpret execution errors, and what to verify before going live.

1. What is the Minimum Required Margin?

The Minimum Required Margin is the calculated minimum balance recommended to run a strategy safely, based on its historical performance. It ensures your account can withstand both historical losses (drawdown) and the margin required to hold open positions.

The Formula

To give you a buffer against unexpected market conditions, the system calculates the requirement using a built-in safety multiplier:

$\text{Minimum Required Margin} = \text{Max Drawdown (USD)} + (2.5 \times \text{Max Used Margin})$

• Maximum Drawdown: The largest peak-to-trough drop in account value during the backtest.
• Maximum Used Margin: The peak amount of capital locked up to hold open positions at any single point during the test.
• Safety Margin Factor: A 2x multiplier applied to your maximum used margin to act as a cushion against margin calls.

2. Understanding Your Allocation Status

The system automatically compares your Allocated Balance against the Minimum Required Margin. You will see one of two statuses:

✅ Allocation Is Sufficient

• What it means: Your allocated balance is greater than or equal to the calculated minimum requirement.
• Message: “Based on historical simulation data, this allocation met the margin requirements of the strategy during the tested period. Actual trading conditions may differ.”

⚠️ Allocation Is Not Sufficient

• What it means: Your current balance is too low, putting you at a high risk of margin-related failures or forced liquidations.