Build a research process—not a winning story.

Write an observable hypothesis

Describe the proposed relationship in terms of information available at a specific time. Define the universe, data inputs, decision schedule, entry and exit logic, sizing convention, and circumstances in which the rule does nothing.

Avoid vague conditions such as “a strong trend” until they have an operational definition. Another researcher should be able to apply the same rule without guessing your intent.

Specify the information timeline

Separate when an event occurs from when a dataset makes it available. Historical records may include corrections or revisions that were unavailable at the original decision time. A simulation should not quietly give its historical self later knowledge.

The backtesting guide explores point-in-time data, universe selection, execution assumptions, and validation as parts of one research process.

Test assumptions as well as outcomes

Inspect reasonable changes to costs, timing, parameters, and market conditions. Record all attempted versions, including the ones that perform poorly. Repeated adjustments informed by a supposedly untouched evaluation set turn it into development data.

Use a declared development process and preserve a later evaluation procedure. A favorable historical result remains conditional on its input and modeling choices.

Make the record useful later

Save data identifiers, configuration, code or rule versions, and the reason for each change. A trading journal captures the gap between a planned process and its execution. A trial log captures how the research itself evolved.

Download the research checklist for a local review structure. No software execution engine, brokerage integration, or order-routing service is supplied by this educational site.