Strategy performance in backtester requires more complexity in the backtester than just the ability to properly synchronize and play back market data for multiple trading instruments over historically available market data, which is a requirement for signal validation that we discussed in the previous section. Here, we need to go one step further and build a backtester that can actually simulate the behavior and performance of a trading strategy over historical data as if it were trading in live markets by performing matching like an exchange would.

We covered all of this in the chapter on backtesting, and it should be clear how complex building a good backtester can be. When the backtester isn't very accurate, validating strategy behavior and performance is difficult since it is not possible to be confident of strategy performance based on the backtester results. This makes the design, development, improvement, and validation of trading strategies difficult and inaccurate.