How To: Backtesting A Trading Strategy The Right Way

You may think you’re clever for coming up with your trading strategy. You may or may not be right about that. Testing it will tell you if it will work. This tells you how to test a trading strategy in the right way so you get telling results that you can use to judge it.

Key Takeaways:

  • There are two basic ways to go about your backtest. The first one involves creating a script that will do the backtesting for you. If you enjoy and/or are good at coding, this might be a good option.
  • The other option consists of manual backtesting, by which you go through the charts yourself and place the trades.
  • That being said, any trading platform (MetaTrader, TradingView, NinjaTrader, etc.) can be used to backtest manually. The only thing you need to do is to scroll back in time and hide the future price movements.

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