Forward Testing (Paper Trading)

Forward Testing – Testing a strategy in live or simulated real-time market conditions on out-of-sample data. Unlike backtesting on past data, forward testing (also called paper trading or walk-forward testing) applies the robot’s rules to new market data to validate performance. This reveals issues like slippage, latency and changing market dynamics not seen in historical tests. In practice, traders run the robot on a demo account or forward period and compare the live P/L to the backtest to check robustness.

⬅ Robots Glossary