Performance · 6 min

Backtests vs Live Trading Results

A backtest is a model of what might have happened under stated assumptions. Live trading is what actually happened with real orders and changing market conditions.

Selection can overfit

Testing many strategies increases the chance that one looks impressive by coincidence. Separate validation and untouched periods help, but cannot eliminate uncertainty.

Execution changes results

Live latency, partial fills, fees, spread and slippage rarely match an idealized historical simulation exactly.

Markets change

A strategy suited to a trend can fail in a range, and relationships between assets can change rapidly.

Use honest reporting

Keep backtest, testnet and live performance separate. Show net returns, drawdown, trade count and losing periods—not only the best result.

Important: Educational information is not financial advice. Automated trading can lose money, and no strategy guarantees profit.

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