Backtest

What it means

Backtesting evaluates how a rule set would have behaved on past data, which can help measure consistency and weakness.

What to watch

Backtests can be misleading if they ignore slippage, poor data quality, unrealistic fills, or changing market regimes.

Where traders usually run into this

Backtest is most useful once it is tied to a concrete page, chart decision, or workflow question.

• Market Replay keeps this term attached to a real glossary instead of leaving it as standalone jargon.
• Optimization keeps this term attached to a real glossary instead of leaving it as standalone jargon.
• Overfitting keeps this term attached to a real glossary instead of leaving it as standalone jargon.

Best next page if this term is blocking you

If you understand the definition but still do not know what to do with it, start with Market Replay. That page is the fastest way to see how backtest shows up in a real glossary workflow.