Quantitative Finance Insights

Quantitative Finance Insights

Enhancing Backtesting Accuracy: Accounting for Realistic Trading Costs

Why Realistic Simulations Matter in Trade Strategy Backtesting

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QPY
Jun 09, 2024
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Photo by Kanchanara on Unsplash

Every trade incurs costs, yet many backtesting models fail to account for these expenses, leading to misleadingly optimistic historical results and underperforming live strategies. Realistic simulations help bridge the gap between backtesting and live trading, providing a more accurate assessment of a strategy’s viability.…

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