Education6 min read
Backtesting vs Forward Testing: Do You Need Both?
Backtesting is essential but not enough. Learn why forward testing catches what backtests miss. See where walk-forward and demo testing catch what backtests.
Backtesting Limitations
- No slippage, static spreads, no emotional hesitation, no real liquidity. Forward testing on demo catches these.
The Proper Sequence
(1) Backtest 200+ trades. (2) Forward-test 50+ on demo. (3) Live with 0.5% risk for 50 trades. (4) Increase to 1%.
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Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.