Backtesting is USELESS @fabervaaleEng responds #trading #forex
In this short dialogue, Speaker A challenges the claim that backtesting is useless, arguing that a disciplined, three‑phase validation process is essential before committing real capital. The phases include (1) historical backtesting to identify an edge, (2) out‑of‑sample/off‑sample checks to verify robustness and drawdown tolerance, and (3) virtual live trading to simulate real‑time execution before moving to live markets. Speaker A emphasizes that while past data isn’t a guarantee of future results, it is a necessary prerequisite, and that skipping these steps leads to premature live trading. Speaker B prompts the discussion by noting widespread skepticism about backtesting and asks for Speaker A’s position, setting up the contrast between common opinion and the advocated methodology.
