Backtesting is useless

Discussion in 'Options' started by JCDST1979, Jun 30, 2020.

  1. Tradex

    Tradex

    We can to some extent, using logic and common sense.
    But yes, you have got a point.
     
    Last edited: Jul 20, 2020
    #131     Jul 20, 2020
  2. userque

    userque

    Well, we'd have to know the exact definition of "useful" that the OP is using.

    If the OP means that, "useful" means that backtesting will improve the system, then we can't argue against it, because there are systems that can't be improved by backtesting.

    (Imagine a system that issues random buy/sell signals. Now imagine a system that does a lot of calculations, but in the end, it's signals are essentially random. Neither of these systems can be improved via backtesting.)

    If the OP will accept that "useful" can also mean that backtesting can tell you when a system may not be profitable, then I agree with you.
     
    #132     Jul 20, 2020
  3. I don’t think that backtesting is useless. It helps us to check the accuracy of our strategies. It helps us to optimize and improve our strategies for future references. We can easily find flaws in it and try to change our strategies if it’s not working well for us. I personally do a lot of back testing and find it really useful.
     
    #133     Jul 23, 2020