Backtesting and Forward Testing Your EA

Before deploying an EA in a live environment, it's crucial to test its efficiency and reliability. Two common methods are backtesting and forward testing.

1. Backtesting

Backtesting involves running your EA against historical data to see how it would have performed. It's a simulation of your trading strategy against actual market movements of the past.

Steps for Backtesting:

2. Forward Testing (or Paper Trading)

Forward testing, sometimes called paper trading, means testing your EA in real-time on a demo account. While backtesting uses historical data, forward testing evaluates the EA's performance in current market conditions without risking real money.

Steps for Forward Testing:


Both backtesting and forward testing are essential steps in ensuring your EA functions as intended. While backtesting offers insights based on historical data, forward testing provides a real-world test run without the risk. It's advisable to employ both methods before trusting an EA in a live trading environment.

NEXT UP: Risk management in algorithmic trading