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Backtesting
Also called: Backtest
Backtesting is running a trading or investing rule on historical prices to see how it would have behaved — its trades, returns, drawdowns and costs. It describes the past; it does not predict future results.
Test 'buy Nifty 50 stocks when the 50-day average crosses above the 200-day, sell on the opposite cross' on 2015–2025 daily data with brokerage and taxes, and read its CAGR, maximum drawdown and number of trades.
Backtesting is running a trading or investing rule on historical prices to see how it would have behaved — its trades, returns, drawdowns and costs. It describes the past; it does not predict future results.
Test 'buy Nifty 50 stocks when the 50-day average crosses above the 200-day, sell on the opposite cross' on 2015–2025 daily data with brokerage and taxes, and read its CAGR, maximum drawdown and number of trades.