Backtesting Basics and Sample‑Size Discipline Backtesting shows past performance, not future certainty When you run a backtest, you are simp

Backtesting Basics and Sample‑Size Discipline Backtesting shows past performance, not future certainty When you run a backtest, you are simply replaying a strategy on historical price data. The numbers look convincing because they are based on real market moves, but the test only reflects the conditions that existed in that specific period. If the market regime changes – for example, from a low‑volatility environment to a high‑volatility one – the same rules may behave very differently. This is why backtesting alone can hide flaws such as over‑fitting (tuning parameters so tightly to past data that they capture noise rather than...