The key to back testing is all about the historical date.  Although past data is not a guarantee for future results, it sure is a key to some level of success.  In order for me to develop a strategy, I took 10 years worth of data and dissected it.  The process was very long.  However I found a winning strategy.  I did my backtesting manually.  There are stock software programs which will make the process a bit easier.

The trades that I have done each day, I back test during the night.  I go over what worked well or what did not work and WHY.  I look at the time frames in which I based my analysis on and the proceeding areas of support and resistance.  I then narrow in on the daily chart and do the same thing but on a smaller time frame.  This process is done daily.