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MangoTheta Guide

Your first backtest

In this tutorial you build one simple strategy and test it on one month of past data.

What you will build: sell one NIFTY call and one NIFTY put at the same strike every morning, with a stop loss on each. This is called a short straddle. New words are explained on the Key words page.

  1. Open the Strategy Builder.

    In the left menu, under BACKTEST, click Strategy Builder.

  2. Choose the strategy type.

    You see three cards. Click Time-Based / Pure Risk. This type enters at a fixed time of day, with no indicator to wait for.

  3. Check the Strategy Setup section.

    The form is already filled with sensible starting values:

    Field Starting value What it means
    Underlying NIFTY Trade NIFTY options
    Trade Type Intraday Close everything the same day
    Entry Time 09:20 Enter at 9:20 am
    Exit Time 15:15 Close anything still open at 3:15 pm
    Start Date / End Date the last 3 months The past days to test on

    For this first test, set Start Date and End Date to cover one full month. A short window runs faster and is easier to check by hand. Leave everything else as it is.

  4. Open the Leg Builder.

    Click 2. Leg Builder to open it. Two legs are already there:

    • LEG 1: SELL, CE, Current Week, ATM, 1 lot
    • LEG 2: SELL, PE, Current Week, ATM, 1 lot

    Together these two legs are a short straddle: every day at 9:20, sell the call and the put at the strike closest to the index.

  5. Add a stop loss to each leg.

    In each leg, type 25 in Stop Loss and keep the unit as % legs.

    This means: close the leg if its price rises 25% above the price you sold it at. Example: a leg sold at ₹100 is closed when its price reaches ₹125.

  6. Set a daily loss limit (optional, but a good habit).

    Click 3. Universal Exits. In Max Loss / Day (₹), type 5000.

    If the strategy’s loss for the day reaches ₹5,000, everything is closed and no new trades are opened that day.

  7. Name it and run it.

    In 4. Review & Run:

    • Read the summary card. It shows exactly what you built. A blank field shows as “—”.
    • In Strategy Name, type a name that says what it does, for example NIFTY straddle 25% SL.
    • Click SAVE if you want to keep it. Saved strategies appear in the My Strategies.
    • Click BACKTEST.

    The button changes to PROCESSING…. When the run finishes, the results appear below the form.

  8. If you see an error instead.

    • “No market data for the requested window”: your dates are outside the data the app holds. The message tells you which dates are available. Pick dates inside them. You are not charged for a refused run.
    • “Low credits, refill the account”: your account needs more credits. Your balance is in the top-right corner (CREDITS). Click TOP UP to add more.

  9. Read the result.

    Check these four things first, in this order:

    1. Any yellow notes at the top. “This run took no trades” means something in the setup stopped every entry. Fix the setup before reading any number.
    2. Total trades. Each leg counts as one trade, so a straddle that traded on 20 days shows about 40.
    3. Maximum drawdown. The worst fall from a high point, in rupees. Ask yourself: could I sit through this loss?
    4. Net PnL after costs. In Editable Costs, tick Govt. Charges to subtract the government charges, and type your broker’s charge in Brokerage (₹/fill).

    Every number is explained on Reading your results.

  10. Change one thing and run again.

    Change only one setting, for example the stop loss from 25 to 35, and run again. Compare the two results. If you change several things at once, you cannot tell which change made the difference.

What next

Section titled “What next”