Back Testing

The glossary on explains it well:

“Back Testing: A strategy that is optimized on historical data, then applied to current data to see if the results are similar. Rarely done properly and usually resorts to a form of curve fitting.”

Yep, that is what it is…

Back testing can be useful to quantify a complete system, but back testing has many weaknesses and is very rarely applied and used correctly. To be sure, just look at the actual performance post back test of those who advertise back tested performance.

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