CEX Testnets

CEX Testnets

Testnets on centralised exchanges are playgrounds to experiment with the exchange websites and APIs.

Testnet environments are populated with free testnet money. They usually have their own orderbooks with orders placed using this free money. If you're trying to test if your strategy is profitable, you should not be using testnet because this data is not real-money data. You cannot expect a testnet market to behave similar to a real money market. Any strategies tested on testnet will not behave the same.

It's extremely useful for verifying that your API implementation is working as expected without risking any real money, or for experimenting with features on the website, but if you want to validate if your strategy is profitable you should be either using a backtester on real market data (make your own if needed) or trade on the real market in the production environment.

More recently the exception here is demo trading. Some exchanges have started to support demo trading (different from testnet) as an environment to experiment with strategies with realistic market conditions and executions.