In my last post, I wrote about to use the Binance API to pull historical prices for various Crypto assets. In this article, we will start to build the foundation for simple backtester. A backtester is a software tool that allows traders and investors to simulate the performance of their trading strategies using historical market data. By applying a set of rules to the historical data, a backtester can provide valuable insights into how a strategy would have performed in the past, helping traders make more informed decisions in the future.
We will focus on generating buy/sell/hold signals against historical price data using various trading strategies. Simulating trades, associated costs, performance etc. is out of scope for this post but will be covered in a future post. Specifically, we will cover the following: