What is forward testing?

What it means

Because the data has never been seen, forward testing cannot be overfitted by construction. It also captures the things a backtest cannot: real spread variation, real slippage, real broker behaviour and real gaps in the data feed.

Why it matters

Its cost is time. A strategy taking ten trades a month needs the better part of a year to accumulate a sample worth interpreting, and there is no way to accelerate that. Vendors who advertise a strategy weeks after building it are not showing you forward-test evidence, whatever the label says.

What this changes in practice

Demo accounts are close to live but not identical — fills are often more generous and slippage more forgiving. The gap is usually small on liquid instruments and can be substantial on gold during volatile periods, so a strategy that is marginal on demo should be assumed worse live.