Do you do backtesting? If yes, what do you test and how do you decide what to test?


I assume that most people use their own logic and investment criteria when they do backtesting. And hence there could be thousands of ways to do it –

If you do backtesting, even if not often, or had done it in the past, do you sharing your experience as in –

  1. what are the most common backtesting strategies you used ? if you could provide an example that would be great. for example it could be something like – buy stock and then sell covered call before earnings release (now, this could be a bad strategy, but then that's what I wanted to find out whether it was for the given stock)
  2. how do you decide what to backtest ?
  3. which tools did you use ? people have written on this sub about using coding and stuff. as a non-techie, how you did it ?
  4. did your backtesting ultimately help you make an investment decision ? for example, your test gave you enough confidence to make a invest/don't invest decision
  5. how has been the results of your investments which were based mainly on your backtesting ?

Would love to hear opinions from the members of this sub.

Thanks in advance!

ps: Yes, history doesn't predict future in stock markets, and backtesting can be helpful only as much. Yet, would love to know out of curiosity.


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