From Backtest to Live Trading

Going live is the real test, and results almost always come in below the backtest. Here is a step-by-step path from paper trading to real money, and the rules for deciding when a system is broken.

Expect less

Live results usually trail backtests because of costs, slippage, hidden overfitting and changing markets. A common rule of thumb is to expect meaningfully lower returns and deeper drawdowns than the test showed. If a system only works at its backtested best, it probably will not work.

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