Backtesting

Backtesting is a method used to evaluate how a trading or investment strategy would have performed in the past. By applying the strategy to historical market data, investors can analyze its effectiveness and potential risks before using it in real-time trading. It helps determine if the strategy is likely to be profitable and identify any flaws or adjustments needed. Essentially, backtesting allows investors to learn from previous market conditions to make informed decisions about future investments, reducing uncertainty and increasing confidence in their strategies.