Fees, slippage and the next open: three assumptions that decide a backtest
The same rule on the same prices can win or lose depending on what a trade costs, what price it gets and when it fills. Here is what each assumption does to a result.
Notes from
the lab.
Plain-English writing on testing trading ideas: how to read a result, how to avoid fooling yourself, and the small assumptions that decide everything.
Backdrop: real BTC-USD daily candles, 1 Oct 2024 to 29 Sep 2026, Coinbase Exchange.
Overfitting in plain words: why your best settings are probably lying
Try enough combinations and one will look brilliant. How to tell a real effect from a lucky cell, with a sweep and an out-of-sample check on real prices.
How to read a backtest: twelve numbers, and the order to read them in
Total return is the number people look at first and the one least able to tell you whether a strategy is any good. A reading order, worked through on a real example.
The example is already loaded.
Open the tool and it is running an SMA crossover on two years of real Bitcoin prices. Change one setting and watch the result move. No account until you save.
Simulated results. Hypothetical performance has limits and is not a guarantee of future returns. Educational use only, not investment advice. Risk disclosure