MONEY GLOBE XBuilding & Testing a Strategy · Lesson 2
Honest back-testing
Costs, biases and the numbers that matter
Professional - Gold & Platinum
In this lesson
Include realistic costs and avoid look-ahead and survivorship bias so back-test results mean something.
Key takeaways
- Include fees and slippage on every trade; high-frequency strategies are most sensitive.
- Look-ahead bias uses information not available at the time.
- Survivorship bias ignores delisted or failed assets; data snooping finds luck.
- Judge maximum drawdown, expectancy, trade count and losing-period length — not just total return.
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Next lesson: Overfitting and walk-forward testing
Educational information only - not financial advice.