Trading Concept
Backtesting
Running a strategy against historical data to evaluate how it would have performed, before risking real capital.
Backtesting replays history through the strategy logic. Given this price data, these signals, these timing rules — what would the results have been? The output is a performance record: returns, drawdown, win rate, trade count, Sharpe ratio.
A backtest is not a prediction. It tells you what happened, not what will happen. A strategy that performed well on 2020–2024 data may fail in 2025 if market conditions changed. Backtests are vulnerable to overfitting (curve-fitting the strategy to historical noise), survivorship bias (only testing assets that still exist), and look-ahead bias (using information that would not have been available in real time).
The botwir3 builder includes backtesting as a pre-compile evaluation step (available to Workshop subscribers). The backtest runs the same gate logic and strategy modules against historical platform data. Results are informational — they show how the configured strategy would have behaved under historical conditions. They do not predict future performance.