What a backtest can tell you
A backtest shows how a defined set of rules would have behaved under specified data and execution assumptions. It can reveal exposure, failure patterns and sensitivity to settings. It cannot establish the prices a live account would receive or the choices a future developer might make.
Where the optimism enters
Trying many settings and selecting the best result lets luck enter the selection. Using a later period to revise the rules also means that period is no longer unseen. A test is only blind while its outcome cannot influence the decision being evaluated.
Record the rules, dates and selection method before judging a new period. Keep failed runs in the evidence file. Otherwise a polished report can hide how many attempts preceded the displayed winner.
Move through an evidence ladder
- Reproduce the rules and reconcile trades with the intended platform.
- Test genuinely unused periods with frozen values.
- Vary prices, costs, delays and operating conditions.
- Observe forward execution and account equity over time.
- Separate live money, demo and simulation in every report.
What we will ask of Mint
Mint belongs to this publication’s owner, so its research must be labelled as our own. A historical result is not a live investment return. Any future performance page should identify the exact version, account type, broker, period, costs and open-risk evidence.
No return figure or investor availability is asserted in this launch edition. The purpose of the research section is to explain the evidence we would need before making a stronger claim.
About this article
Original editorial explanation and illustrative arithmetic. No provider performance or personalised investment recommendation is presented.