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How to read a backtest

Overfitting, look-ahead bias and survivorship, and how Coteau labels tests

What a backtest is

A backtest applies fixed rules to past data to see how they would have done. It's a hypothetical record: no real trades, fees or market impact.

Common traps

Overfitting: tuning rules until they fit the past, which tends not to repeat. Look-ahead bias: using data that wasn't available at the time. Survivorship bias: testing only companies that still exist today and leaving out the ones that failed.

How Coteau shows them

Coteau keeps live records and backtests apart: a solid line is live, a dashed line is a backtest, and the strict backtest tool lists the test rules alongside the results.

Educational only. Describes ideas and how Coteau shows them; not a forecast and not advice.

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Systematic research · Not investment advice · Hypothetical unless marked Live · Data: Yahoo Finance (15-min delayed), SEC EDGAR, House Clerk · Important disclosures · Contact desk@coteau.app

Coteau 0.9 · Oct 21, 2026