Survivorship – Djremixganna

Survivorship

Understanding Survivorship Bias in Backtesting: A Guide to Robust Trading Strategies

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The vast majority of aspiring traders have a fantasy about becoming a new millionaire after meticulously developing trading strategies and very heavily back-testing them. More often than not, such a goal, however, commits an important fallacy: the survivorship bias. It represents the error whereby a trader chooses only the winning strategies, indicators, or stocks from … Read more

Survivorship Bias in Trading: Avoiding the Problem

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The selection of strategies and analyses is wrongly constructed by many trading and investing strategies: they ignore an essential factor, known as survivorship bias. This cognitive bias may be highly distorting our perception of success and failure in financial markets. Without recognizing this bias, traders build flawed strategies based on incomplete data with unrealistic expectations … Read more