Every time I come across a “good” backtest, the first thought that hits me is: this is too good to be true. The numbers look beautiful, the curve seems smooth, and I can’t help but think — if only I had started this exact system three years ago, I’d be done by now. But then the doubts creep in.
What if the next three years don’t look like the past three?
What if I’m actually entering at the peak drawdown period of this system?
What if the edge isn’t real at all, and I’m just curve-fitting?
And even if the system is sound — what if the market makers see it coming and outrun it? What if retail investors pile into the same approach, squeezing out whatever tiny advantage there was in the first place?
Then there’s the psychological side. Backtesting doesn’t account for me exiting winning trades too early, cutting my profits short. Or holding on to losers far too long, convincing myself they’ll turn in my favor. Those habits can easily destroy a mathematically strong edge.
Sometimes I think the solution is simple: don’t look. Just let the system run for a month, let the bots do the trading, and stop injecting emotions into every tick. No panic exits, no “what if” spirals, no second-guessing.
Backtesting gives me confidence, but it also humbles me. It reminds me that markets evolve, edges decay, and emotions remain the hardest opponent. Maybe the real takeaway is this: the backtest isn’t the finish line — it’s just the starting point.