⏰ What "backtested" actually means.
Running a strategy's rules against historical data to see how it would have performed.
🟩 What it genuinely proves:
The logic is coherent, the risk limits hold under past conditions, and the strategy isn't obviously broken.
🟥 What it can't prove:
Past conditions repeat. They don't, exactly.
Real fills match simulated ones. Slippage and liquidity aren't in a backtest.
🔈 A backtest tells you a strategy survived history.
It doesn't tell you it will survive tomorrow.
Running a strategy's rules against historical data to see how it would have performed.
🟩 What it genuinely proves:
The logic is coherent, the risk limits hold under past conditions, and the strategy isn't obviously broken.
🟥 What it can't prove:
Past conditions repeat. They don't, exactly.
Real fills match simulated ones. Slippage and liquidity aren't in a backtest.
🔈 A backtest tells you a strategy survived history.
It doesn't tell you it will survive tomorrow.
