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Strategies and backtests
7 guides · about 14 minutes
7 guides · about 14 minutes
- 01What a backtest can and cannot tell youA backtest applies fixed rules to past prices. It is good at ruling ideas out and bad at promising anything. How to read ours.2 min
- 02Survivorship biasOur stock backtests run on the companies we cover today. The ones that failed along the way are missing, which flatters every result. How much, and what we do about it.2 min
- 03Lookahead, and how trades are timedA backtest cheats if a decision uses a price it could not have known. The exact timing rule our engine follows, and the one place hindsight still gets in.2 min
- 04Costs in a backtestEvery trade in our backtests pays a cost, on by default. What is charged, what is not, and why turnover decides how much it matters.1 min
- 05How each number is computedThe exact definition of total return, CAGR, volatility, Sharpe, max drawdown, hit rate and turnover as our engine calculates them.3 min
- 06How a strategy picks its stocksA strategy is a pool, some filters, a ranking and a rebalance schedule. The signals available and how to read the basket it holds today.2 min
- 07Running your own backtestGive the backtester tickers and weights and it returns the record against the S&P 500. What to enter, what you get back and the bias you bring with you.2 min