Is Backtesting Enough to Guarantee a Trader's Success?

[Kevystia]

Backtesting is a crucial tool for me, as it provides valuable data on the potential performance of my strategies before applying them in real markets. It allows me not only to optimize my strategies but also to manage risks and increase my confidence in my trading decisions. 
I recommend doing backtesting at least twice a week, even if you are profitable; it is a very powerful tool.

[joniboini]

So you're answering your question, then? It sounds like you're quite confident that backtesting is important for a trader's success already. I believe nothing can guarantee your success as a trader unless you can see the future.

As far as I know, backtesting is usually used to train or manage trading bots. If you're doing daily trading wouldn't the trading result show whether your strategy works or not? How would you backtest your daily trading strategies? On which app? It would be nice to know if you have a dedicated tool for that.

[Kevystia]

So you're answering your question, then? It sounds like you're quite confident that backtesting is important for a trader's success already. I believe nothing can guarantee your success as a trader unless you can see the future.

As far as I know, backtesting is usually used to train or manage trading bots. If you're doing daily trading wouldn't the trading result show whether your strategy works or not? How would you backtest your daily trading strategies? On which app? It would be nice to know if you have a dedicated tool for that.

By trading daily and consistently backtesting, you'll start to see your mistakes and identify the principles you're not fully following in your own strategy. Backtesting lets you put your strategies to the test—it’s like a shortcut or an accelerator. If you're truly dedicated and passionate about trading, I believe you should leverage this tool to regularly refine your strategy (not to change it, but to add certain insights). This will give you experience in no time since you'll have access to historical data from years before you even started trading.You can backtest on several trading platforms, but I personally use TradingView. To access this feature, you’ll need to subscribe to one of their paid plans. You can also use platforms like FXReplay.

[betswift]

So you're answering your question, then? It sounds like you're quite confident that backtesting is important for a trader's success already. I believe nothing can guarantee your success as a trader unless you can see the future.

As far as I know, backtesting is usually used to train or manage trading bots. If you're doing daily trading wouldn't the trading result show whether your strategy works or not? How would you backtest your daily trading strategies? On which app? It would be nice to know if you have a dedicated tool for that.

-snip-
You can backtest on several trading platforms, but I personally use TradingView. To access this feature, you’ll need to subscribe to one of their paid plans. You can also use platforms like FXReplay.

What would be the difference between the two?

[Kevystia]

So you're answering your question, then? It sounds like you're quite confident that backtesting is important for a trader's success already. I believe nothing can guarantee your success as a trader unless you can see the future.

As far as I know, backtesting is usually used to train or manage trading bots. If you're doing daily trading wouldn't the trading result show whether your strategy works or not? How would you backtest your daily trading strategies? On which app? It would be nice to know if you have a dedicated tool for that.

-snip-
You can backtest on several trading platforms, but I personally use TradingView. To access this feature, you’ll need to subscribe to one of their paid plans. You can also use platforms like FXReplay.

What would be the difference between the two?

The difference between TradingView and FXReplay is that one is a trading platform where you can perform live analyses on various financial assets (TradingView), while the other is solely dedicated to backtesting (FXReplay).
And I bet that all beginner or professional traders know about TradingView. I say this because when I started trading, TradingView was the first platform I came across.

[betswift]

So you're answering your question, then? It sounds like you're quite confident that backtesting is important for a trader's success already. I believe nothing can guarantee your success as a trader unless you can see the future.

As far as I know, backtesting is usually used to train or manage trading bots. If you're doing daily trading wouldn't the trading result show whether your strategy works or not? How would you backtest your daily trading strategies? On which app? It would be nice to know if you have a dedicated tool for that.

-snip-
You can backtest on several trading platforms, but I personally use TradingView. To access this feature, you’ll need to subscribe to one of their paid plans. You can also use platforms like FXReplay.

What would be the difference between the two?

The difference between TradingView and FXReplay is that one is a trading platform where you can perform live analyses on various financial assets (TradingView), while the other is solely dedicated to backtesting (FXReplay).
And I bet that all beginner or professional traders know about TradingView. I say this because when I started trading, TradingView was the first platform I came across.

Thanks, I knew about trading view, but I never bought any plans or used backtesting at all.
All manually, all by hand

[Silberman]

Backtesting is a crucial tool for me, as it provides valuable data on the potential performance of my strategies before applying them in real markets. It allows me not only to optimize my strategies but also to manage risks and increase my confidence in my trading decisions. 
I recommend doing backtesting at least twice a week, even if you are profitable; it is a very powerful tool.

There is nothing you can do that can guarantee your success, whether you are talking about long term or short term success, what backtesting can do is to give you the confidence of using a strategy that can be successful if used appropriately by you, albeit this assumes that you did your backtesting in the correct way, which is not a given as it is very easy to make mistakes at that stage and believe you have a great strategy when in fact this is not the case, a very dangerous scenario for you or any other trader.

[EL MOHA]

Backtesting is a crucial tool for me, as it provides valuable data on the potential performance of my strategies before applying them in real markets. It allows me not only to optimize my strategies but also to manage risks and increase my confidence in my trading decisions. 
I recommend doing backtesting at least twice a week, even if you are profitable; it is a very powerful tool.

Agree with almost everything you said about backtesting it has been a very good way of actually improving your strategy and learning from your mistakes. Backtesting helps you build your own personal strategy instead of just following others strategy. Backtesting gives one confidence when they see a similar setup they have done before and it gives one confidence in a strategy. This with a very good risk management makes one have a very good trading psychology which is hardest thing to get over and if done Makes one a great trader.

Backtesting is always going to tell you if a strategy will work for a particular pair or not so certainly backtesting is a great idea to be a successful trader. But one thing you need to understand backtesting is just actually giving you information of the past trend or simply the history of the pair, but does this guarantees success; it’s a No because past even are not usually indicative of future success as such backtesting gives you a better edge of getting a good result but it doesn’t necessarily guarantees the results

[joniboini]

By trading daily and consistently backtesting, you'll start to see your mistakes and identify the principles you're not fully following in your own strategy. Backtesting lets you put your strategies to the test—it’s like a shortcut or an accelerator.

I can see your point, but what if the 'mistake' that I made gives me better results? Does this mean my strategy is a failure or does this show that I'm adapting or betting correctly? I'm not saying this to discourage people from backtesting though, just that it's probably a good idea to not blindly judge every unplanned action that you take as a mistake. Maybe more experienced traders can give insight into this.

That being said, the scenario that I talked about is rare, at least for the average joe. Most of them usually become too greedy and don't stick to their plan instead of improving on the fly because the market becomes aggressive and the patterns change. CMIIW.

[SmartGold01]

Backtesting is a crucial tool for me, as it provides valuable data on the potential performance of my strategies before applying them in real markets. It allows me not only to optimize my strategies but also to manage risks and increase my confidence in my trading decisions. 
I recommend doing backtesting at least twice a week, even if you are profitable; it is a very powerful tool.

Most traders I mean those who knows what they are doing knows their strength and weakness in trading, and during their weak it shows that the strategy they were applying weren't working and then backtesting should be the right thing to do, though most people ends up doing that but yet still falls into some lapses since they aren't perfect with it.

As far as I know, backtesting is usually used to train or manage trading bots. If you're doing daily trading wouldn't the trading result show whether your strategy works or not? How would you backtest your daily trading strategies? On which app? It would be nice to know if you have a dedicated tool for that.

The language I understand from the op is like simply saying if the previous strategy doesn't work looking for a better one and play them could be the best than just sticking the previous, that is why most people who do back-test still results back to what they had been facing due to either greed or fear of a market pressure and forces.

[Text]

Backtesting is a powerful tool, but it's not a crystal ball. While it can't guarantee success, it definitely helps refine strategies and manage risk. I think backtesting is valuable for daily traders too! Even if live results give some insights, backtesting lets you explore a wider range of scenarios with historical data. This helps identify weaknesses your live trading might miss.

No single tool guarantees success. But by constantly honing your strategy and learning from past mistakes, you're definitely stacking the odds in your favor.

[Mahanton]

Backtesting is a crucial tool for me, as it provides valuable data on the potential performance of my strategies before applying them in real markets. It allows me not only to optimize my strategies but also to manage risks and increase my confidence in my trading decisions. 
I recommend doing backtesting at least twice a week, even if you are profitable; it is a very powerful tool.

Backtesting would really be that crucial or something that would really be needed when you do make trades. If you do find yourself having that kind benefit when it comes to your trading sessions then stick into that.
You are the ones who would really be finding out on which will really be that beneficial for you. You are the ones would be finding out on the moment that you do hover into this market.
There's no such thing about guarantees about success because there would be tons of factors will really be affecting the outcome and no one really knows on how it looks like.
Backtesting will really be that relevant, you would be able to make out analysis out of those histories on price movements in past which you could be able to apply on the current one.

Just like on what everyone is really that saying that not all does even know about back testing even if you are a trader. You would really be able to find out its relevance on the moment
that you do go in depth with trading. Backtesting might be your main considerations on trying to deal on with.

[nelson4lov]

Of course not. Backtesting isn't a guarantee for trading success rather it is one of the tools that are needed in your trading toolbox that would give you an edge. If you have a strategy or multiple strategies. There is no better way to test if the strategy/strategies work than to backtest it to see if that strategy have worked out more times than it has failed.

Other factors you'd really want to consider is strategies itself, psychology, risk management, etc.


Backtesting alone won't cut it unfortunately.

[logfiles]

Back testing is almost similar to simulation trading and should not be a guarantee 100%, but it helps give an idea about how the strategy might work (or whether it's so good or so bad)
Back testing relies on past market data with hope that the market trends remain the same in the near future. You can never know what the future market holds.

[shinratensei_]

I think it just give you insight whether the strategy is already outdated or not. doesn't guarantee trader's success but at least it gives you insight that it might work.

yes it's a powerful tool since with trading you basically given minimal information and should be predicting on a probability, so it does help a lot, but then again, market dynamically change, if market just decided to do some random price action, your strategy might fail despite back testing.

always adapt to the market and its ever changing dynamic, the key for being a good trader always be able to adapt to the trend and follow the flow.

[joniboini]

The language I understand from the op is like simply saying if the previous strategy doesn't work looking for a better one and play them could be the best than just sticking the previous, that is why most people who do back-test still results back to what they had been facing due to either greed or fear of a market pressure and forces.

Yeah, I think his reply to my post makes it clearer. He also suggests that backtesting can help identify whether we're following our strategy closely or not, so it's not necessarily about creating new techniques but about figuring out habits and maintaining discipline too. I'm not sure how many people do backtesting regularly, but I'd assume the average joe who easily falls for emotional pressure probably doesn't do that. It takes some effort to stick with trading and improving your skills on that. CMIIW.

[doomloop]

Backtesting is a powerful tool, but it's not a crystal ball.

Ah so it was a kind of tool? I really thought it was some kind of a practice, you know "testing" but it may be done in a different way or it was its other variation due to that "back'' word there. Anyways, yeah, there are no other crystal balls other than the literal crystal ball one but even that one is I think still highly doubtful if it really can tell the future. And if it is true, then that person who does that won't offer his service anymore in public for some pennies because they will just use it personally to make thousands of dollars every single time.

While it can't guarantee success, it definitely helps refine strategies and manage risk

Yes. This is only the most realistic thing that we had and this is better than nothing, so for sure many are still doing this, since they also came here to try and see if they can multiply their money or not.

[retreat]

Backtesting is a crucial tool for me, as it provides valuable data on the potential performance of my strategies before applying them in real markets. It allows me not only to optimize my strategies but also to manage risks and increase my confidence in my trading decisions. 
I recommend doing backtesting at least twice a week, even if you are profitable; it is a very powerful tool.

Some traders say that backtesting helps them to test their trading strategies and see how they perform in the market, and it shows them positive results. But there are also traders who do not really consider doing backtesting, because they see that the market is dynamic and we cannot rely on past market data for the future. So it depends on the trader how they see this backtesting, if they see that backtesting is important enough, they can practice it, if the results are positive they can use it for their trading - or if they feel it is not important then they can ignore it. But please note that backtesting is a trading method, and no trading method guarantees trading success.

[Asiska02]

Backtesting is a crucial tool for me, as it provides valuable data on the potential performance of my strategies before applying them in real markets. It allows me not only to optimize my strategies but also to manage risks and increase my confidence in my trading decisions. 
I recommend doing backtesting at least twice a week, even if you are profitable; it is a very powerful tool.

Since I learnt about trading, I have never back tested to know the strategy I’m using is okay or not. What I do most is forward testing and I can still know my mistakes when the market later plays out. I have seen many people back testing and using it as a very powerful tool for them to know the direction of the market using pst historical trend in the market. I see that it is an essential tool for most traders but since I have not tested it, I cannot ascertain it is for me. You as a trader must have gotten use to it and just want to be sure if it’s working for others. It is very important to know that what you see works for you may not work for others, it depends on how each person perceive the market and can tell the direction of it.

[el kaka22]

While there is definitely benefits of using it and learning more about your strategy, backtesting alone doesn't guarantee anything at all as well. Just because it could have made a lot of profit, doesn't mean it will make a lot of profit, there is no way of knowing if that will work or not.

If you could do backtesting, you can definitely see terrible ones and just get rid of those strategies, but when there is a great one, still be careful about it on the long term and if you could test with smaller capital first, then you can continue to grow it eventually. This is how most professional traders do, they put a small amount and if what they see actually works then they keep going with it and make more profit with bigger capital.