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The 7 Backtesting Sins That Kill Trading Strategies Before They Start
- Fabio Capela
- Algorithmic trading , Quantitative finance , Risk management , Systematic trading , Portfolio management , Backtesting , Trading systems , Investment strategy
Bottom Line Up Front: Even the most sophisticated trading algorithms fail in production because of fundamental backtesting errors. After analyzing thousands of strategy failures, we’ve identified seven critical mistakes that account for over 90% of the gap between backtest and live performance. Master these, and you’ll avoid the graveyard of “perfect” strategies that blew up on day one.
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