How to test stock strategies without losing money
I've been trying to improve my stock trading strategy lately, but it’s hard to tell if it’s actually working or just a matter of luck. Every time I tweak something, the market shifts, and the results no longer make sense. I’ve heard that backtesting can help determine what’s effective over time, but I’m not sure how to do it properly. Does anyone know a good way to test strategies safely before risking real money?
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The best way to find out if your stock trading strategy really works is to backtest it on real historical data. A great tool for that is https://forextester.com/en/stock-backtesting-software/, which lets you replay market movements as if they were happening live. You can analyze how your entries and exits would’ve performed in different conditions, spot weaknesses, and adjust your system before putting capital on the line. It’s much better than paper trading because it gives a realistic experience while helping you build consistency.