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Backtesting Trading Strategy
01:09 Mins Read
Make informed and better investment decisions by using Backtesting Trading Strategy.
"Backtesting Trading Strategy before you buy anything, be it a mobile phone or a car, you would want to check the history of the brand, its features etc. and check if it is worth your money. The same principle applies to trading. But what is backtesting?
In simple words, backtesting is a trading strategy where one can test the hypothesis/strategy on prior time periods. The underlying theory is that any strategy that worked well in the past is likely to work well in the future, and conversely, any strategy that performed poorly in the past is likely to perform poorly in the future. It is accomplished by reconstructing, with historical data, trades that would have occurred in the past using rules defined by a given strategy. The best strategies are those that work best for the individual investor's objectives and risk tolerance. Let's discover more of these trading strategies in detail and how to use them, on Smart Money by Angel Broking."