Hi Inuvest team,
Once again a layman question. I understand Live trade is real trading where we put actually money. I wanted to understand the difference between Paper Trade and Backtest options while choosing portfolio type.
Found these options in the dashboard here - [Attached].
No worries, and thanks for the question.
Paper Trade is virtual trading in a live market without putting in actual money. This helps traders to understand how their strategy would perform in real market. It also takes care of slippage, i.e., when a signal is generated, orders are recorded not based on last traded price but based on market depth i.e., the price at which market order would get executed.
Backtest is done to check how your strategy would have performed on historical data. Generally, it is used to quickly get a sense of how your strategy have performed historically. You can also use this function to improve your strategy.