Backtesting in Trading - Need for a Software?

This thread is opened to discuss the importance of backtesting in trading and the possible need for a backtesting software.

Personally, I have experienced that manual trading can be learned and performance improved through practice based on historic data. However, I always lacked a proper backtesting platform. I did buy Forex Tester, but found it limited and complex. Simulated live trading, such as offered by Trading View for example, is too slow for proper practice.

Now, having also stocks, various securities and cryptocurrencies in mind, I was wondering if there is need for a tool that does just that. In my head, it would be something that provides a realistic trading simulation (with margins, transaction costs, etc.) where you could not only trade manually, but test various strategies (written in, let’s say, JavaScript).

One pain I experienced was actually obtaining historic data. I would’ve really appreciated the option to subscribe to certain data packages, such as FX, certain stocks or cryptocurrencies.

Having all this in mind, I would love to create a software that does just that, but it would be a waste to create it only for myself. That’s why I’m curious what you think about it.

Do you believe backtesting is important?
Is there a need for a backtesting software as described?
How do you currently conduct backtesting? What is good/bad about your solution?
Which features would you love to see in a backtesting software?
Would you prefer a classic software (such as Forex Tester) or an online solution (such as Trading View)?

I’d love to hear your input!

Cheers,
Pavel

Good luck with your project pavelv7!

I'm not a great fan of back testing, apart from the basic testing of an idea. I much prefer forward testing. It is more realistic in my humble opinion, guards against curve-fitting and is a great way to practice patience.

I understand your concern here and you may be lucky to find a backtesting software that fits your trading style. However, there's an infinite ways to trade, and using a backtesting software will limit your potential. The long-term solution here is to learn data science, which means you need to learn programming (Python or R) so you can dig deep into the data, analyze and create a trade model. As time goes by, you'll get used to it.

Hi,

From my point of view, if you think longterm, you have to do your homework. Don't skip this step. Do it manually, even it takes lot of time, that's the way. Trust me

Cheers!

If you're backtesting tool was free - I would use it.

I would use as many learning tools I could get my hands on it. Paid for subscriptions and software in the trading industry can get pricey though.