Backtesting is often criticised by those who claim it is either unnecessary and/or that you cannot guarantee results in the future based on analysis of past events. It is important to acknowledge that backtestingis limited. You cannot guarantee future performance based on past results. However, lacking anything else to go on, it is a useful tool for putting a strategy through its paces before you risk money on it. Backtesting means taking the rules for a trading strategy and subjecting them to historical data to see if it would have traded profitably in the past….