I've been exploring different investment strategies and am considering diving into backtesting to see how some of these strategies might perform based on historical data. However, I'm relatively new to the concept and would love some guidance on how to effectively start with backtesting.
Here are a few questions I have:
Tools & Software: What are some good tools or platforms (preferably free or low-cost) that I can use for backtesting? I've heard of platforms like QuantConnect and TradingView, but I'm curious about any other options that might be worth exploring.
Data Sources: Where can I find reliable historical data for different asset classes? Are there any particular sources that offer comprehensive and clean datasets?
Metrics & Analysis: What are key performance metrics I should focus on when evaluating the results of a backtest? I've heard terms like "Sharpe ratio" and "maximum drawdown," but I'm not entirely sure what they mean or how to interpret them effectively.
Common Pitfalls: What are some common mistakes or misconceptions when it comes to backtesting that I should be aware of? How can I ensure that my backtest is both realistic and robust?
Learning Resources: Are there any books, online courses, or articles that provide a solid foundation for understanding and conducting backtests effectively?
I'm eager to learn from those who have experienced this journey and can share insights or tips. Thanks in advance!