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Backtest
A historical simulation that applies defined trading rules to past market data to generate hypothetical trades and results.
A backtest depends on the data, settings, assumptions, costs, and execution methods used. It describes what the rules would have produced under those conditions. It does not represent actual trading or predict how the same rules will perform in the future.
Also called:
Historical test; strategy backtest
Related terms:
Historical Data; Hypothetical Performance; Test Period
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