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BACKTESTING · PREVIOUS-DAY LOW BREAKOUT

Previous-Day Low Breakout Backtest in Crypto: Fees, Slippage and Break-Even Costs

A break below the previous day's low can be traded as continuation (short) or fade (long). Testing both on the same data shows which the market rewarded.

By ChartsPod Editorial Team · Reviewed by ChartsPod Research
Published · Updated · 5 min read

Short answer

A previous-day-low (PDL) rule either shorts a break below yesterday's low (continuation) or buys a reclaim after the break (fade). Both depend on the day boundary. Shorting perps adds funding (paid or received) to costs; include it. Compute break-even cost for each version, test them on the same period and compare by regime. Stop-entry shorts below PDL often pay extra slippage during fast drops.

Break-even cost

ItemValue (illustrative)
Trades140
Gross avg per trade+0.35%
Fees (2 × 0.05%)−0.10%
Slippage (2 × 0.05%)−0.10%
Net avg per trade+0.15%
Break-even round-trip cost0.35%
Previous-Day Low Breakout: edge vs cost per trade (%)Previous-Day Low Breakout: edge vs cost per trade (%): Gross edge 0.35 %; Fees 0.10 %; Fees + slippage 0.20 %.PREVIOUS-DAY LOW BREAKOUT: EDGE VS COST PER TRADE (%)Gross edge0.35 %Fees0.10 %Fees + slippage0.20 %
Edge per trade versus cost per trade. Original ChartsPod editorial graphic.

Continuation vs fade

VersionTradesNet avg (illustrative)
Short the break140+0.12%
Buy the reclaim95+0.21%
Short break, downtrend only70+0.33%
Illustrative net avg (%)Illustrative net avg (%): Short break +0.12 %; Buy reclaim +0.21 %; Short, downtrend +0.33 %.ILLUSTRATIVE NET AVG (%)Short break+0.12 %Buy reclaim+0.21 %Short, downtrend+0.33 %
Regime filter changed the answer. Original ChartsPod editorial graphic.

Conclusion

Related: Previous-Day High Breakout Backtest in Crypto: Fees, Slippage and Break-Even Costs, Failed Breakout Reversal Backtest in Crypto: Fees, Slippage and Break-Even Costs.

Backtest the previous-day low breakout rule with costs in ChartsPod.

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Stop-entry shorts below PDL often pay extra slippage during fast drops.

Review Previous-Day Low Breakout Backtest in Crypto with bar replay before using it live.

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Questions readers ask

Should I short or fade a PDL break?

Test both on the same data.

Does funding matter?

Yes, on perpetual shorts.

Why more slippage?

Stops trigger during fast drops.

Sources and methodology

Backtest cost logic follows TradingView's Pine Script strategy documentation; indicator definitions are standard. All performance numbers are illustrative examples of the method, not results of real tests.

  1. TradingView Pine Script: Strategies — simulated fills and assumptions.
  2. TradingView Pine Script: Repainting — live vs historical calculation.
  3. ChartsPod documentation — guides for order flow, derivatives, alerts, backtests, journal and workspaces.

This article explains research tools and workflows. It is not financial advice, does not recommend buying or selling any asset and does not predict prices. Crypto derivatives carry a risk of rapid and total loss of margin.

CHARTSPOD EDITORIAL EDITION · RESEARCH AND EDUCATION ONLY · NOT FINANCIAL ADVICE.