Backtesting
Backtesting is testing a set of trading rules against past price data to see how they would have done. It gives you a record of results before you risk money.
In depth
You pick a clear rule, then walk it through history. Say the rule is: buy when price holds above yesterday's high, stop 1 percent below, target 2 percent above. You check 200 past days, write down every trade, and add up the result. By hand this is slow. Software does the same job in seconds.
The catch is that a past result is not a promise. Rules can be tuned until they fit one stretch of history and then fail on new data. Test across several years and several market moods. Use it to throw out broken ideas, not as proof of future profit.
Why it matters
Trading an untested idea means paying real money for information you could have had for free. A test shows the losing runs in advance. If your rules produce eight losses in a row somewhere in the data, you know that before it happens rather than while your account is shrinking.
TraderLog measures the trades you actually took. Your fills import from Schwab and IBKR, and the stats page gives win rate, average winner and loser, profit factor and expectancy, so a live result can be checked against the one you were hoping for.
Frequently asked questions
No. It shows what your rules would have done on past data. Markets change, so treat it as evidence, not a forecast.
Enough to cover several market moods, usually a few years for a daily rule. Six months of one calm stretch tells you little.
Keep your Backtesting trades on the record in TraderLog
Trades import from Schwab and IBKR on their own, every day lands on a calendar with its P&L, and the day's entry sits beside it. Replay any trade on a TradingView chart. Free for 14 days, no card.
Every trading morning at 8:40 ET our model draws the SPY, QQQ and IWM zones it expects to matter, on a TradingView chart, before the open. Where price reaches one, it has turned 74 percent of the time. Free, no account. See today's map