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As of the year 2010 more than 70% of the stock shares traded on the NYSE and NASDAQ are generated from automated trading systems.
Automated trading systems are computer software programs designed to trade stocks, futures and forex based on a predefined set of rules which determine when to enter a trade, when to exit it and how much to invest in it.
Trading system designers / programmers often test their automated trading systems on historical or current market data in order to determine whether the underlying algorithm guiding the system is profitable or not.
Backtesting software are special trading platforms which enable trading system designer to develop and test their trading systems on historical market data while aiming to produce optimal historical results.