backtesting — StaxInvesting Blog

automation backtesting options education

Walk-Forward Analysis and Out-of-Sample Testing: How to Actually Validate a Strategy

Everyone says to forward-test a strategy to catch overfitting. Almost no one explains how to structure that testing rigorously. Out-of-sample validation and walk-forward analysis are the methods: optimize on data the strategy is allowed to see, evaluate only on data it is not. This explains how they work, the anchored-versus-rolling choice, the data-leakage traps, and the honest limit that even these methods can be gamed.

Stax TeamAug 5, 2026

automation backtesting options education

How to Read a Backtest Without Fooling Yourself

A backtest result is only as honest as the assumptions behind it, and several common ones systematically make a strategy look better than it is. Tick versus bar data, slippage assumptions, survivorship bias, look-ahead bias, and overfitting each inflate results in a specific way. This is a practical guide to reading a backtest report without letting it fool you.

Stax TeamAug 5, 2026

automation backtesting paper trading

Paper Trading vs Backtesting: They Answer Different Questions

Backtesting and paper trading are both ways to test a strategy without risking money, and they are not two grades of the same thing. They answer categorically different questions, one about the past you can see, one about live conditions you have not, and each has its own failure mode. Treating them as interchangeable, or treating either as proof a strategy will profit, is how traders talk themselves into confidence they have not earned.

Stax TeamAug 5, 2026

0dte options liquidity slippage

0DTE Liquidity: Bid-Ask Spreads, Fill Quality, and the Slippage That Ruins Backtested Edges

0DTE options on SPX and SPY look highly liquid, and at the money they genuinely are. But the surface picture hides three things that cost real money: spreads that widen away from the money and late in the session, displayed size that barely reflects true liquidity, and fills that blow out catastrophically in exactly the fast markets you most need to exit. The through-line is slippage, the hidden cost that makes a profitable backtest an unprofitable strategy.

Stax TeamJul 29, 2026