How accurate are methods such as back testing?

The economics of stock markets are quite different from anything; there is not a single predictive algorithm or solution which can tell you exactly how the movement is going to turn out. Put simply there are way too many moving pieces for anyone to accurately judge the exact movement of the stocks and their prices.

Despite all of these factors and issues, there are still attempts made by people to predict and see the course of the stock’s prices. A lot of these tools can be surprisingly accurate and one such method or tool is backtesting.

What is backtesting and what exactly does it require?

When you want to know how a certain company might perform in the future, you are looking for tools which will help you grasp how the movement is likely to be and how you can prepare yourself for the movement. One very important tool is … Read More