Trading glossary

Backtesting

Backtesting is the process of testing a trading strategy against historical data to estimate how it would have performed. It is a way to check an edge before risking real money, but results depend heavily on data quality and realistic assumptions about slippage and costs. Backtesting answers whether a system has historical promise; journaling answers whether you actually execute it well live. The two tools complement each other. A journal such as DuskAnalyst focuses on live execution review, showing whether your real trades match the strategy you intended to run.

Why it matters for your trading journal: Backtesting turns journaled history into evidence: instead of guessing whether a rule works, you replay it across your own closed trades and measure the result. A journal is the raw material, so the more consistently you log, the more trustworthy the test.

Example: Example: filter 200 journaled EURUSD trades by session and check whether the 'London open only' rule actually improves your win rate before you trade it live.