# Backtesting

Backtesting is the general method for evaluating a trading strategy, how well it would have done in the past. Backtesting assesses the viability of a trading strategy, evaluating trade signals generated on the current strategy using historical data to produce results, taking it as historical performance if the strategy would be deployed in that time frame. It provides confidence to employ it going forward, but is not an indicator of the future.

Backtest settings on CryptoHero does not affect the bot's performance in any way after deploying the bot.

### Time Frame

Backtesting can be done in 6 different time frames, 1 Day, 1 Week, 1 Month, 3 Months, 6 Months, 1 Year. Longer time frame can weed out market noises over a period of time while shorter time frames can evaluate current prevailing  trends. It is good practice to draw conclusions from backtesting multiple time frames for each bot.

Backtest can only be done within the selected Time Frame from the day the Bot is created. CryptoHero does not support any custom date and time setting for Backtesting.

### Data Source

CryptoHero uses candlestick data pulled from their respective exchanges. For Paper Trading, data will be taken from Binance. Trade signals are evaluated with each candlestick's open value, determined by the frequency. Choosing a longer time frame with higher frequency might take a longer time for CryptoHero to evaluate the data as more candlesticks are involved.

| Candles Per Frequency / Time Frame | 1D  | 4H   | 1H   | 15M   |
| ---------------------------------- | --- | ---- | ---- | ----- |
| **1 Day**                          | 1   | 6    | 24   | 96    |
| **1 Week**                         | 7   | 42   | 168  | 672   |
| **1 Month**                        | 30  | 180  | 720  | 2880  |
| **3 Months**                       | 91  | 546  | 2184 | 8736  |
| **6 Months**                       | 182 | 1092 | 4368 | 17472 |
| **1 Year**                         | 364 | 2182 | 8728 | 34912 |

Some cryptocurrencies might not have enough data going back in time for new coins that are listed on the exchange. They could exist on other exchanges but if they are newly listed on the exchange, CryptoHero will not have access to data from other unsupported exchanges.


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