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Back test

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Back test. A back test simulates the investment return that an investment strategy would have produced over a specific period.

For example, someone who wanted to evaluate a strategy of buying after stock splits might test the effect of having purchased 500 additional shares in the large-cap stocks in a hypothetical portfolio each time one of the stocks split during the period from 1957 to the present.

Back testing is sometimes used to support a current investment strategy by demonstrating that it would have enjoyed strong past performance. Critics point out that the testing period that's chosen has a significant impact on the results and that past performance doesn't guarantee future returns.



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A back test at times comes as an aide in judging a good robot.
At some point before the end of the day I will revisit the S&P trading day and back test my plan and system.
Fourthly the creators make money with their Forex currency trading system because they back test and analyze their system''s performance regularly, plus they track specific metrics over time.
 
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