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AI-Powered Automation: Building a Crypto Trading Bot Reading lesson

Backtesting Pitfalls and Overfitting

Module 4 · Trading Strategy Development
12 min
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Reading lesson Premium 12 min

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Common Pitfalls A backtest that looks perfect is almost always wrong. Here are the most dangerous mistakes: 1. Look-Ahead Bias Using future data that wouldn't be available at the time of the trade. Example: using the day's close price to make a decision at the day's open. 2. Survivorship Bias Only testing on assets...
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