What Is Backtesting? How to Test a Strategy Without Code

Backtesting means checking how a trading rule would have performed on historical data before risking real money. Done well it builds confidence; done badly it fools you.

Why backtest?

A backtest turns "I think this works" into a chart you can inspect: would these rules have made money, and how painful was the ride?

Metrics that matter

• Total return & CAGR
• Sharpe — return per unit of risk.
• Max drawdown — the worst drop you must survive.
• Sortino & Calmar — downside-focused refinements.

Traps that fool beginners

• Overfitting — tuning until the past looks perfect.
• Ignoring fees.
• Look-ahead bias.
• Cherry-picking — a live forward record is more honest.

Do it without code

Pick a strategy, move sliders, and see the equity curve, drawdown, monthly returns and risk metrics instantly — fees included, zero risk.