Angie · learn
Backtest
Running a set of rules over history to see what they would have done. It shows what did happen, never what will, and it flatters any rule tuned on the same data.
A fuller explanation of this one is still being written. The definition above is the short answer.
See also
- Out of sample — Testing on data the search never saw. Angie hides the last quarter of history, then re-runs the winners on it, and flags any whose result collapses.
- Curve fitting — Tuning a strategy until it memorises one stretch of history. It produces beautiful backtests and no future returns, which is why results are held out and re-tested.
- Buy and hold — Buying once and doing nothing. The benchmark every strategy must beat, measured over the identical window, because beating nothing is not a result.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
