Manual backtesting with market replay
Manual backtesting means applying your rules to historical data, candle by candle, without seeing the future. It is the most honest way to find out whether a strategy has an edge before you risk money.
How to do it properly
- Closed rules: entry, stop, target and filters written down.
- Unseen data: random moments, not charts you already remember.
- Candle-by-candle replay: decide with only the information available at that moment.
- A complete log: date, session, direction, R achieved and whether you followed your rules.
How many trades?
Fewer than 30 trades tell you nothing; 100 to 200 start to show the real expectancy. Also check the worst losing streak: you will have to live through it with real money.
Biases to avoid
Hindsight bias (seeing what happened before deciding) and over-fitting rules to a handful of examples are the most common errors.
Frequently asked questions
What is the difference between manual and automated backtesting?
Automated backtesting codes the rules; manual backtesting has a person apply them, which also trains chart reading.