See the full explainer: Backtest vs. Forward Test. In short, backtesting runs a strategy's rules against historical data to estimate how it would have performed, using real historical prices with honest costs applied (round-trip fees plus slippage), out-of-sample splits, and no look-ahead bias.
A backtest is necessary but not sufficient evidence: it can still be curve-fit to the specific history it was tested on, however carefully it's built. That's why zengtrade treats a backtest as the starting hurdle, not the finish line. Every strategy still has to earn a live forward paper track record before the go-live bar even considers it.
Educational content, not investment advice. zengtrade is paper-first and non-custodial.