Forward testing applies a rule set to market data that arrives after the test period, usually by running it on a demo account in live conditions. It exposes problems a backtest cannot, such as execution delays, spread widening during news and the difficulty of following the rule manually. Because it covers only a short window, it is a useful check but still a small sample.
Forex glossary
Forward Testing
Related term
Backtest
A backtest runs a set of rules over historical price data to see how that rule set would have performed in the past. It answers a narrow question about history…
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