ETF Backtesting API: Build Reliable Investment Simulations
Understand ETF backtesting inputs, metrics, common data mistakes, and how to integrate a buy-and-hold simulation into an application.
Start with a reproducible baseline
Buy-and-hold is the best first backtest because its assumptions are easy to inspect. The request needs a symbol, initial investment, start date, and end date. The response should explain the effective trading dates if either requested date falls on a weekend or holiday.
A useful result includes ending value, total return, annualized return, maximum drawdown, and an equity curve. These outputs let a user verify both headline performance and the path taken to reach it.
Avoid common backtesting errors
Do not compare assets across different effective date windows. Avoid mixing raw and adjusted prices, and never silently fill long gaps in market history. A backtest should reject symbols without enough observations rather than manufacture confidence.
- Align comparison start and end dates
- Document dividends and transaction-cost assumptions
- Use deterministic rounding rules
- Return data freshness with the result
Integrating the API
Keep simulation requests on the server so your API key is protected. Validate dates before sending the request, display provider error messages, and cache identical simulations. Data Captain exposes buy-and-hold and comparison workflows backed by the same historical series used elsewhere in the platform.
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