“Backtesting is a method used by traders to test a trading strategy on relevant historical data.” – InvestopediaLearn More....

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The Process of Backtesting Your Portfolio Strategy

The process for effectively backtesting your portfolio strategy can be broken down into several steps:

1. Select Your Strategy:
   The first step involves identifying which investment strategy you wish to test—be it long-term holding or short-term trades like day-trading strategies.
   
   
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   .This may include selecting particular stocks or assets you intend to analyze further along with any specific parameters related to risk management such as stop-loss limits etc., that need consideration during simulations..'
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2. Your Testing Period:Select Your Historical Data Range;- Choose an appropriate period within which your chosen investments historically traded; generally speaking longer periods yield more realistic assessments due simply because they encompass varying cycles across economic climates etc., thus providing greater statistical relevance overall!. However! Be sure also remember too not go too far beyond present day either!. Most importantly…never skip out when considering major events impacting markets globally during these times! .) - After conducting your tests carefully review results generated from them such as performance metrics like Sharpe ratios among others which indicate risk-adjusted returns relative against benchmarks set beforehand! .
   - Performance Metrics;
   - Return on Investment (ROI)
   'Sharpe Ratio' ;(to measure volatility); 'Maximum Drawdown' (the most significant drop over any period) ; 'Win Rate' (the percentage rate at which profitable trades were made). . . . .' .)

   “Backtests allow us to simulate our strategies using historic data so we can evaluate potential performance.” – QuantConnect'Read More...' . - .) . - — - — - — — — — — — — — — — — — — — ———- —  —  —    —     —     —      —— ——­——­——­——­ —–,—–,—–,—–,—–,—–, — — — — — _______ _______________ – ________________ – ________________ – ____________________________ _________ — ________________________ ________ — _______________________________________________________ _ ________________________ _____ ___ _ _ _____________ _ _ ________ _______ _ ___ __ ____ ___ _ _ _____________ ____ _____ _ __ __ ____ ___ _ ___________________________________________ ____________________________________________ _______________________________________________ _____________ _________________________ _______________ _________________ _____________ _________________________ ___________ _______________________ ________________________________________ ________________________________________ _________________________________________ ___________________________________________ _________________________________________________ ________________________________________________________ ________________________________________________________ _________________________________________________________. __________________________________________________________. -------------------------------------------------------------- --------------------------------------------------------------- ---------------------------------------------------------------. ----------------------------------------. -------------------------------------. -------------------------------------------. -----------------------. -------------------. -------------. ------------------. ---------------------. -------------------------. -----------. -----------. --------- --- ```

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