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Testing an edge
Backtest
Testing a strategy on past data to see how it would have done. Useful — but easy to fool yourself with, because the past is the one thing you can always "predict." See
overfitting
.
Related terms
Data-mining
→
Monte Carlo
→
Out-of-sample
→
Overfitting (curve-fitting)
→
Sample size
→
Sharpe ratio
→
‹ All 34 terms