Backtesting Trading Strategies with Backtrader

No serious algo trading course skips backtesting. It is the single most important step before you risk real capital. Backtrader is a Python framework that lets you replay historical data and simulate how your strategy would have performed.

Installing Backtrader

pip install backtrader

Writing Your First Strategy

import backtrader as bt\nclass SmaCross(bt.Strategy):\n    def __init__(self):\n        self.sma = bt.ind.SMA(period=20)\n    def next(self):\n        if self.data.close > self.sma:\n            self.buy()

Avoiding Lookahead Bias

The most dangerous mistake in python backtesting strategies is using future data to make past decisions. Always ensure your indicators only look at data available at the bar timestamp.