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How to backtest a trading strategy?

To backtest a strategy, define your trading rules, select a historical dataset, and apply the strategy manually or using software to record outcomes. Key metrics to analyse include profit/loss, win rate, drawdown, and risk-adjusted returns.

Related articles

  • What is the difference between backtesting and forward testing?
  • Why is backtesting important for traders?
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  • Is backtesting difficult?
  • What are the limitations of backtesting?

Articles in this section

  • Is backtesting difficult?
  • What are the limitations of backtesting?
  • Why is backtesting important for traders?
  • How to backtest a trading strategy?
  • What is the difference between backtesting and forward testing?
  • What is backtesting in trading?
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