Backtesting Infrastructure

Backtesting infrastructure is the collection of tools and data environments used to test trading strategies against historical market data. A robust infrastructure allows traders to simulate execution under realistic conditions, including slippage, latency, and market impact.

In crypto, this is particularly challenging due to the lack of clean, long-term historical data and the presence of fragmented liquidity. High-quality backtesting prevents the common trap of overfitting, where a model performs well on historical data but fails in live markets.

It is the primary filter for determining whether a strategy is viable. It is essential for quantitative research.