When backtesting helps
Use backtesting to reject rules that fail obvious historical checks. It is a filter, not a proof that a strategy will work.
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Backtesting vs paper trading
Backtesting asks how rules would have behaved on historical data. Paper trading asks how a workflow behaves now, against live market conditions, without putting live capital at risk.
| Method | Best use | Main limitation |
|---|---|---|
| Backtesting | Quickly test rule logic across historical market data. | Can overfit old conditions and miss live workflow problems. |
| Paper trading | Practice decision timing, risk limits, alerts, and review against current markets. | Still does not reproduce live fills, slippage, fees, or emotions perfectly. |
| Forward testing | Watch rules operate over time before live capital is involved. | Takes patience and enough sample size to become meaningful. |
When paper trading helps
Use paper trading to review agent behavior, decision logs, drawdown, trade frequency, and whether your process stays disciplined over time.
Trading Boy context
Trading Boy focuses on paper-trading agents, decision journals, risk controls, and review loops so traders can evaluate process quality before any live-capital workflow is considered.