Backtest should be used to evaluate strategy logic and historical performance. It does not guarantee future returns.
A backtest simulates trades using past data, while live execution happens in real time. Results may vary due to slippage, liquidity, fast price movement, order execution, brokerage, taxes, and other charges.
For example, a strategy may show a positive result in backtest, but live performance can change if orders are executed at different prices or if market conditions are different from the tested period.
| Scenario | Solution |
|---|---|
| My live return is lower than the backtest return | Live trades may have been affected by slippage, liquidity, charges, or market movement. |
| The backtest was profitable, but live trades are not | Historical performance does not guarantee future results. Review the strategy logic and risk. |
| I changed slippage and the result changed | The backtest recalculates performance using the updated slippage percentage. |
| My live order was not executed as expected | Live execution depends on market conditions and order availability at that time. |