Beginner
Understanding Backtesting: Concepts and Common Pitfalls
A concept-first course on backtesting for coders, engineers and systematic traders who want to know what a backtest can and cannot tell them before they write one. You will learn the anatomy of a proper backtest, how Indian price data misleads you through splits, bonuses and delisted stocks, and the five biases that turn random noise into a beautiful equity curve. You will then price the real frictions of trading on NSE and BSE, brokerage, STT, slippage, impact cost, circuit limits and capital gains tax, and learn to read CAGR, drawdown and Sharpe ratio the way a sceptical reviewer would. No code is required; every idea is illustrated with Indian stocks, Nifty data and worked numbers you can reproduce in a spreadsheet.
BacktestingLook-Ahead BiasSurvivorship BiasOverfittingTransaction CostsSlippage and Impact CostDrawdown and Sharpe RatioWalk-Forward Testing
MODULES
4
DURATION
~2.5 hrs
TRACK
Algorithmic Trading
What You'll Master
What a backtest actually measures, and the difference between a historical simulation and a forecast
The five components every backtest needs: universe, signal, rules, execution assumptions and evaluation metrics
Why raw NSE prices lie without split, bonus and dividend adjustment, and how to spot an unadjusted series
How look-ahead bias, survivorship bias, overfitting and selection bias each inflate results, with Indian examples
How to price Indian transaction costs in basis points: brokerage, STT, exchange charges, GST, stamp duty and slippage
Why liquidity, circuit limits and impact cost make many small-cap signals untradeable in practice
How to read CAGR, volatility, maximum drawdown, Sharpe and Calmar ratios together rather than in isolation
How to run robustness checks such as out-of-sample tests, parameter sweeps and walk-forward analysis before trusting a result
Access Level
LEARNER
Everything included
Full Text Playbooks
Actionable Exercises
Mobile Reading Mode
Lifetime Updates
Curriculum Breakdown
Chapter 1: What a Backtest Is and Is Not
4 LessonsChapter 2: The Biases That Fake a Good Result
4 LessonsChapter 3: Execution Reality: Costs, Liquidity and Fills
4 LessonsChapter 4: Reading and Judging Results
4 Lessons▶
The Metrics That Matter: CAGR, Volatility, Drawdown, Sharpe and Calmar11 min read
▶
Benchmarks and Regimes: Was It Skill or Was It the Nifty?10 min read
▶
Robustness Checks: Parameter Sweeps, Walk-Forward and Monte Carlo11 min read
▶
From Backtest to Live: Paper Trading and the Pitfalls Checklist10 min read