// TRADING TERMINOLOGY
What is Backtesting?
The process of testing a trading strategy using historical data to see how it would have performed in the past.
In-Depth Explanation
Backtesting allows traders to identify the strengths and weaknesses of a strategy before risking real capital. It is the foundation of systematic trading.
Practical Example
"After backtesting the strategy over 5 years of data, the trader found it had a 65% win rate."
Related Terms
Master the language of risk
Knowing the terms is just the start. Learning how to apply them is where the edge is found.
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