Backtesting is Way Different from Live Trading

smbcapitalFree Daily Trading Video

Backtesting is necessary to develop a system but not sufficient to prove YOU can make money. In this video Seth Freudberg discusses:

  • Mid-prices not easy in fast market
  • Testing software data may be imperfect
  • Mid-price may be a distortion—synthetic equivalent may be more accurate.
  • Multiple trades means you may not be attending to the one being tested.
  • Emotion—do you have the strength to follow your plan—the riskier, the less likely.

Enjoy the video.


* no relevant positions