Mastering the Custom Strategy Builder

When this is the right tool

Two ways to end up here. You have an idea the presets cannot express — a particular slice of the market, or a specific view about what makes a stock worth holding. Or you started with a quick strategy, pressed Customize, and landed here with every preset filled in and editable. The second route is easier and more common: reacting to a working configuration beats specifying one from scratch.

This is not the serious version of the builder. It is the version that asks more of you — five steps, each asking one kind of question, arriving in the order the strategy will actually use them.

One idea runs through all five: mid-sized companies rising steadily, held about fifteen at a time, tolerant of a bit of drift.

Step 1 — Universe & Filters

This step decides what the strategy may ever hold. Nothing later can rescue a stock excluded here.

Universe is the first and biggest choice — nine options, and they are not all the same kind of choice. Five widen by size rank: Nifty 50, Nifty 100, Nifty 200, Nifty 500, Nifty All. Four target a segment directly: Nifty Midcap 150, Nifty Smallcap 250, Nifty MidSmallcap 400, Nifty Total Market 750.

That distinction matters more than it looks. A segment index is not a broader version of a rank index. Nifty Smallcap 250 is not "more market" than Nifty 100 — it is a different part of it, with the larger companies removed rather than added. Our running idea wants mid-caps specifically, so it takes Nifty Midcap 150 rather than reaching for a bigger number.

Liquidity is worth understanding properly, because the label undersells it. It is 20-day average volume × price — an average daily traded value in rupees, over a rolling twenty-trading-day window. The averaging is the point: one unusually busy day does not make a thinly traded stock eligible, and a stock whose volume has quietly dried up stops qualifying without a separate rule.

Both checkboxes are phrased as inclusions and start unticked — so the default is exclusion, and you widen the universe by opting in rather than switching a filter on.

Step 2 — Technical Rules

Step 1 said what may be held. This step says what looks worth holding.

Moving Averages offers 50-day, 100-day and 200-day SMA, and you may select more than one. These are simple moving averages — the builder offers no other type. Rate of Change (ROC) Filters offers 1-Month, 3-Month, 6-Month, 9-Month and 12-Month windows, and despite the name it ranks rather than filters: tick several and the universe is ranked once per window, then each stock's ranks are averaged. A new Custom strategy starts with the 50- and 200-day SMA and the 6-Month ROC ticked — defaults you are free to clear.

What each measures, and why combining too many causes trouble, is the subject of its own article. What matters here is that they are yours to choose.

Ranking Method deserves more attention than it gets. Two options, Absolute Returns and Volatility Adjusted Returns, answering a question no other control does: once you have a set of eligible stocks, what does best mean?

Absolute Returns means the one that rose most. Volatility Adjusted Returns means the one that rose most for the amount it moved around getting there. Run the same eligible set through both and you get two different portfolios from identical filters — the second will tend to prefer steadier climbers, the first the sharpest movers.

Our running idea says steadily, so it takes Volatility Adjusted Returns. That single dropdown does more to shape the resulting portfolio than most of the checkboxes above it.

Step 3 — Portfolio Settings

Ranking produces an order. This step decides how far down it to go, and what makes a holding leave.

Number of Stocks and Exit Rank work as a pair. Number of Stocks runs from 5 to 50; Exit Rank runs from your Number of Stocks up to 200, so it can never be tighter than the holdings count. The helper text under the field follows whatever you set: with 5 stocks it reads "Must be between 5 and 200", with 15 it reads "Must be between 15 and 200". It is normally set wider: a strategy holding the top 15 with an Exit Rank of 25 tolerates a stock slipping to 16th, and lets go only once it falls past 25th.

That gap is the design decision. Close together, the strategy sells on small ranking movements and trades more. Far apart, it holds positions well past the point they stopped being among its best ideas. Our running idea says tolerant of drift, so 15 and 25 fits.

Exit Delay is the setting most likely to be misread. Its options are None, Delay by 1 period, Delay by 2 period and Delay by 3 period — and a period is the strategy's own rebalance cycle, not a day. "Delay by 1 period" on a monthly strategy is a month; on a daily strategy it is a day. Same setting, wildly different behaviour, and nothing on the screen tells you which.

Rebalance Frequency comes with a second control that depends on it — a Rebalance Day (Monday to Friday) for Weekly and Fortnightly, a Rebalance Date (1st to 31st) for Monthly, and nothing for Daily. Two otherwise identical strategies rebalancing on different dates will produce different historical results, which is worth remembering before reading much into a small difference between two backtests.

Stop losses are a subject in their own right — what each measures from, and why a NiveshBuddy stop is a rule checked on a close rather than an order resting in the market, is covered separately.

Step 4 — Backtest Settings

Three settings: an Investment Amount (₹5,00,000 by default, at least ₹10,000), a Transaction Cost, and a Backtest Period. Two of them deserve a second look.

Transaction Cost (each buy & sell) is a percentage, between 0 and 1%, and defaults to 0. It is charged on every buy and every sell, so a round trip pays it twice. It is your assumption about your own costs — not a NiveshBuddy fee, and not a figure the platform charges or recommends. Leaving it at zero is a choice too, and it means the result you are about to read assumes trading is free.

The Backtest Period decides what "tested" means. It offers Last 1 year, Last 5 years and Custom (start and end dates appear only on Custom, and only trading days can be picked). How far back you can go depends on your plan, and NiveshBuddy's history begins in 2021. A Backtest Period Information panel comments on your choice as you make it:

The selected period spans 5 years. Longer periods provide more reliable results but may include different market regimes.

That second clause is the honest half. A longer window is not simply better — it is more evidence and a mixture of conditions the strategy may have handled very differently. A window containing only a rising market tells you little about a falling one, so our running idea accepts a span long enough to include a bad stretch.

Step 5 — Review

The last step reads the configuration back, and it is worth reading rather than clicking past. This is the only place the whole specification appears at once — steps 1 to 4 each show a slice, and a contradiction between slices is far easier to spot here. A tight universe with a high holdings count, say, or a fast Super Trend Filter on a monthly rebalance.

If you left the Description empty, the builder writes one for you — a one-line summary of the rules, like the one above, which becomes the strategy's subtitle on its results page. The ROC row also says how several windows are used: "Ranked on the average of these windows."

Its Run Backtest button creates the strategy and runs its backtest in one action. Every backtest from this builder spends one Strategy credit, so the app asks you to confirm first and shows how many you have left this month. What that backtest can and cannot tell you is a separate question, and the more important one.

Coming back to it: Customize and Save As

A strategy is rarely right the first time, and you change it from its results page or its card on My Strategies.

Customize reopens it in this builder, titled Customize Your Strategy, with every setting as you left it. Two things are different: there are no Quick and Custom tabs, and the name is fixed. The final button reads Update & Run Backtest, and because it is a Custom backtest it spends one Strategy credit, after the same confirmation. The new run becomes the strategy's current result; the earlier one is kept in its Backtest History, where the two can be compared side by side.

Save As is the other route: it copies the strategy under a new name, at no cost, and leaves the original untouched. Use it when you want to keep both versions as separate strategies rather than as two runs of one. Either way, change one thing at a time — it is the only way the comparison afterwards can tell you what the change did.

Two ways to get this wrong

Key takeaways