What is the Correlation Between Backtesting and Forward Testing?

There is a very significant relationship between Backtesting, Out of Sample and Forward Testing. All the mistakes that a trader needs to avoid when implementing a trading strategy.
Traders who are eager to employee trade idea in the real market mostly makes a mistake by completely relying on backtesting results to evaluate whether a system is profitable or not. However, backtesting is a means to get valuable information provided to trader yet it is often misleading because it is only a part of the estimation process.
Out of sample testing and forward testing then comes into play to complete the evaluation process. As they provide further evaluation of a trading system’s effectiveness and reveals true color before trader actually putting real cash on the line. Thus, for the actual determination of a trading system, Good Correlation between Backtesting, Out of sample, and forward performance testing is very crucial.
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