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Trader Faculty

A structured trading curriculum across stocks,
forex, crypto, futures and commodities.

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  • 01What is Trading?
  • 02Trading 101
  • 03Risk & Money Management
  • 04Setting Up Your Trading Setup
  • 05TA Masterclass
  • 06Fundamental Analysis for Traders
  • 07Trader Mindset
  • 08Build Your Trading System

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Home>Courses>Build Your Trading System>Lesson 7 of 8

Backtesting your system

Testing a strategy on past data before risking real money.

Build Your Trading System·Lesson 7 of 8

All lessons

By the end of this lesson you'll be able to:

  • 01Define backtesting
  • 02Explain what it can and cannot prove
  • 03Avoid common backtesting traps
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is Backtesting in Trading? A Guide to Strategy Validation
Key terms
BacktestingTrading PlanWin RateRisk of Ruin

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What does backtesting mean?

  2. Question 02

    What does a good backtest mainly give you?

  3. Question 03

    What is a key benefit of a solid backtest?

  4. Question 04

    What does curve-fitting mean?

  5. Question 05

    A backtest that looks flawless on one hand-picked window is most likely what?

  6. Question 06

    Where should a robust edge work?

  7. Question 07

    For an honest backtest, what should you include?

  8. Question 08

    To backtest honestly, what should you do?

  9. Question 09

    After a promising backtest, what is the sensible next step?

  10. Question 10

    Backtesting gives you evidence, but what can it never do?

Answered 0 of 10 · pass 70% (7/10) to complete

Build Your Trading System7 of 8
  1. Trading strategies overview
  2. Day trading
  3. Swing and position trading
  4. Scalping
  5. Strategy types: trend, range, breakout, mean reversion
  6. Building a trading plan
  7. →Backtesting your system
  8. Forward testing and validation
  9. ⚑Final Assessment· 20 Q