Backtest

What it is

A backtest runs a trading rule over historical data to see what it would have done.

It is the standard way to evaluate a strategy — and, done carelessly, the standard way to fool yourself.

The three things that must be in it

A backtest without all three of these is not a result:

Must include	Otherwise
Look-ahead protection	The rule uses information it could not have had (look-ahead bias)
Survivorship handling	The dataset excludes the failures (survivorship bias)
Costs and slippage	A rule that trades often looks free when it is not

This is rule 3 of the standards stated concretely.

How to check

Ask for the parameters: the window, the universe, the cost assumptions.

If none are stated, the curve is a screenshot, not a result.