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Backtesting strategies provides insights into their potential effectiveness from "summary" of The 97% Swing Trade by Tim Morris
Testing trading strategies against historical data reveals their strengths and weaknesses, offering traders a clearer view of how those strategies might perform in future market conditions. By simulating trades based on past price movements, it becomes possible to identify patterns and predict outcomes with greater accuracy. Using past performance data, traders can analyze various metrics like win rates, profit-to-loss ratios, and drawdown periods. This analysis helps to eliminate strategies that may seem appealing at first glance but lack a solid foundation when scrutinized against real market behaviors. Each trade simulation provi...
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