Master Stock Backtesting: Handling Outliers Like a Pro

🚫 Don’t Let Outliers Ruin Your Trading System Performance
Are your backtests secretly lying to you? Outliers—those monster trades and insane bull runs—can distort your trading system and lead to costly drawdowns.

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In this video, I walk through how to identify and neutralize the impact of outliers when developing or optimizing a trading system. If you’ve ever found a system that looks amazing in backtest—but fails miserably in live markets—this is probably why.

I’ll show you how to:

Recognize periods of astronomically good market behavior

Decide when to exclude or isolate massive outlier trades

Run parallel optimizations (with and without outliers)

Spot when trend following exits are being skewed by a handful of big wins

Avoid curve fitting to unrealistic conditions that won’t repeat

This is one of those subtle but critical skills that separates long-term systematic traders from the ones who crash and burn.

⏱ Chapters
00:00 – Why You Should Avoid Tuning to Bonkers Markets
00:20 – Using the Full Dataset (Without Burning Out-of-Sample)
00:40 – Spotting Unrealistically Good Market Periods
01:00 – Why Optimization Must Focus on Normal Market Conditions
01:20 – Using Dual Optimizations to Detect Trade Outliers
01:40 – Outliers and Trend Following: A Hidden Danger
02:00 – Loosening Exits = Bigger Drawdowns
02:20 – Why Outlier-Based Systems Often Fail in Live Trading

💬 Drop your questions or share how you deal with outliers in the comments—I’d love to hear from you!

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Видео Master Stock Backtesting: Handling Outliers Like a Pro канала Enlightened Stock Trading