For years, I was obsessed with perfect backtests. You know the kind—equity curves that look like ski slopes in reverse, zero drawdown, 99% win rates, and a Sharpe ratio that could make Warren Buffett blush. I’d tweak parameters endlessly, optimize entry signals to the nth degree, and even flirt with curve-fitting just to see that glorious line climb.
But here’s the truth: perfect backtests are seductive lies.
The Mirage of Perfection
Backtests are simulations, not prophecies. They’re built on historical data, which is inherently biased, incomplete, and often irrelevant to future conditions. A strategy that performs flawlessly in hindsight is usually overfit to noise, not signal. I learned this the hard way—strategies that looked divine on paper often crumbled in live trading.
The Cost of Chasing Ghosts
Every minute spent chasing perfection was a minute not spent understanding market structure, refining execution, or building robustness. I was optimizing for beauty, not durability. And when the market changed, as it always does, my “perfect” systems had no resilience.
What I Focus on Now
- Robustness over precision: I’d rather have a strategy that survives volatility than one that dazzles in backtests.
- Simplicity over complexity: Fewer moving parts mean fewer things to break.
- Forward testing and live data: Real-world performance trumps historical fantasy.
- Stress testing: I simulate chaos—slippage, spread spikes, news events—to see how my EA holds up.
The Emotional Shift
Letting go of perfect backtests was liberating. It freed me from the illusion of control and helped me embrace uncertainty. Now, I build strategies that are imperfect but resilient—like a good pair of boots in a muddy market.