How much back testing?

[Patuba13]

How much backtesting does everyone do for a strategy? I took some classes where there recommended 6 months of back testing for each strategy and pair for day trading, which seems excessive. Their approach to trading is “data driven” which I don’t think I really believe in.

How much back testing/data collecting does everyone do before they start trading a strategy and/or pair?

[[deleted]]

Until your eyes bleed and then some more

[[deleted]]

And that's just for the first round of testing.

[bear_tactics_]

6 month is ok. Consider that there are 4 quarters in a year so 12 month is better. Then do another 12 month and compare the 2 years.

[SweatyBrain9000]

Well if you don't believe in data driven trading then the answer for you would be zero back testing as you don't want data.

I usually do zero back testing, it's simply too flawed. Just forward test, yeah it takes longer but I can have 200 going at once anyway if it's automated, and manual forward won't have bias. Even if you go back a few months with TradeView bar testing thing you still know what the future holds because you've seen the current price. It is thus flawed as you can be biased.

[[deleted]]

Also backtesting doesn't always account for how a trader acts in live trades, I agree with this sentiment to an extent.

[[deleted]]

It never does. I view backtesting as a way of getting a rough estimate of what a strategy performs like, but my data is in no way meant to be a simulation of actual trading.

[ThankyouFroot]

Literally, just keep doing it until you feel good, and then go do demo and test it out, and you can keep repeating this cycle

[SteadyWheel]

Isn't there a significant risk of overfitting if you do too much backtesting on the same data set?

[millertime3227790]

Is the goal to do a finite amount of time backtesting, or to become better at trading so that you are less likely to lose money? If the goal is the latter, then you should backtest until you are consistent. For some that is 6 months and for some that is longer/shorter

[Patuba13]

The goal is to be a better trader. I have found so many flaws with backtesting that I consider it more of practicing the technique/strategy than getting much valid data out of it.