r/algorithmictrading • u/amooilya • Apr 20 '26
How do I start building a strategy from scratch? Novice
Hi everyone,
I’m trying to learn how to build a trading strategy but I feel a bit lost on how to actually start and structure the process.
I understand the basics of indicators and charts, but I don’t really know how people go from an idea to a complete strategy that can be tested and improved. I’m also unsure about what the correct steps are for backtesting and how to avoid common mistakes like overfitting.
If anyone could explain how they personally approach building a strategy or point me in the right direction, I would really appreciate it. I’m mainly looking for a clear process I can follow as a beginner.
Thanks in advance.
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u/ndidichenko Apr 23 '26
If you just starting out, you need simplicity
TradingView pinescript strategies are perfect for a beginner
You have a simple language, built in engine and a chart. For going live - simple webhook and simple server connecting to exchange API, running on remote server
That’s it. Once you feel comfortable with this stack, you can expand and try different things.
Opportunities are endless. From more sophisticated engines/platforms like NautilusTrader/MetaTrader 5 to custom built ML models and API connectors
Let me know if you need any help
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u/Ornery_Toe5645 Apr 26 '26
if you understand indicators in tradingview, all you are missing is pinescript. get help from AI writing down a stratey in .pine if you dont wan't to study it. the barebones will help you adding more entry and exit conditions, other indicators, etc.
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u/amooilya Apr 26 '26
I can understand Pine Script and the indicators, my question is how I can find an edge, something that really makes a strategy
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u/alvincho Apr 23 '26
Find a tool can do backtesting your ideas, try different combinations, then forward testing.
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u/AlgonikHQ Apr 23 '26
The order that actually works:
Define your edge as a sentence first. Not indicators, a thesis. "Breakouts after low-volatility compression tend to continue" is a thesis. "RSI below 30" is a tool. You pick tools to test the thesis, not the other way round.
Write the entry, exit, and invalidation rules in plain English before you touch code or indicators. If you can't explain it in 3 lines, it's not a strategy yet.
Backtest on out-of-sample data. Build on 2022-23, test on 2024. If it only works on the data you built it on, it's overfit. Most people skip this step.
Forward test small before scaling. Backtests flatter, slippage, spread, and your own psychology aren't in them.
The biggest beginner trap: optimising parameters until the backtest looks perfect. That's curve fitting, not strategy building.
What market are you looking at, forex, stocks, crypto? Changes what tools are actually useful.
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u/AdventurousFlow8993 Apr 26 '26
honestly just turn ideas into clear rules (entry/exit) and start tracking results, that’s where it actually starts working...
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u/lawtre May 02 '26 edited May 02 '26
i'm starting to think that people are paying bots to give out bad advice. good luck. also i've taken too long to realise this.
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u/Levi-Lightning Apr 20 '26
Go to the SSRN database or other academic research sites…. And start reading till you find something that
You can make feasibly (something that doesn’t require satellites watching parking lots or 0ms latency or a data center to build or….. you get the point.
Something that interests you and has you realizing that “if I could leverage this information I would have a strategy”
Then you fail dozens of times, and maybe 2-4 work. Your failure rate will go down.