What does backtesting mean?
Definitions for backtesting
back·test·ing
This dictionary definitions page includes all the possible meanings, example usage and translations of the word backtesting.
Wiktionary
backtestingnoun
The process of testing a strategy, model etc. using data from a previous time
Wikidata
Backtesting
Backtesting is jargon used in financial industries to refer to testing a trading strategy or predictive model using existing historic data. Backtesting can be considered a type of cross-validation applied to time series data. Backtesting seeks to estimate the performance of a strategy if it had been employed during a past period. This requires simulating past conditions with sufficient detail, making one limitation of backtesting the need for detailed historical data. A second limitation is the inability to model strategies that would affect historic prices. Finally, backtesting, like other modeling, is limited by potential overfitting. That is, it is often possible to find a strategy that would have worked well in the past, but will not work well in the future. Despite these limitations, backtesting provides information not available when models and strategies are tested on synthetic data. Backtesting has historically been performed by large institutions and professional money managers due to the expense of obtaining and using detailed datasets. However, backtrading is increasingly used on a wider basis, and independent web-based backtesting platforms have emerged. Although the technique is widely used, it is prone to weaknesses.
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setting back
Numerology
Chaldean Numerology
The numerical value of backtesting in Chaldean Numerology is: 6
Pythagorean Numerology
The numerical value of backtesting in Pythagorean Numerology is: 3
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"backtesting." Definitions.net. STANDS4 LLC, 2024. Web. 27 Jul 2024. <https://www.definitions.net/definition/backtesting>.
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