What is Backtesting?
Updated October 17, 2026
Backtesting is checking how a strategy would have done on past price data.
You run your rules on old charts and see what would have happened. It's like a test drive with history.
It helps you spot bad ideas fast before risking money.
The danger is overfitting, where a strategy is tuned to look perfect on old data but fails live. Past results never promise future ones.
Example
You test a gold bot on the last three years and see where it won, lost and how deep drawdowns went.
Questions people ask
Can I backtest on MetaTrader?
Yes, it has a built in Strategy Tester for EAs.
Why do backtests look better than live trading?
Real spreads, slippage and changing markets usually make live results worse.
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