Updated 2026-08-26 · General education
From observation to action
A typical flow collects data, calculates conditions, generates a signal, applies limits, sends an instruction, and records the result. Each stage can introduce delay or error.
Backtests are experiments, not forecasts
Historical testing can reveal behavior under selected assumptions. Results may be distorted by overfitting, survivorship bias, unrealistic execution, incomplete costs, or choosing parameters after seeing the data.
Execution changes outcomes
Live results depend on latency, order types, liquidity, partial fills, outages, fees, and provider behavior. A strategy that looks stable before costs may not remain so afterward.
Guardrails and shutdown paths
Useful controls can include exposure limits, data-quality checks, loss thresholds, activity alerts, connection health, and a tested manual stop. Controls must be monitored themselves.
Human oversight remains essential
Someone must own configuration, review anomalies, assess changing conditions, and decide when assumptions are no longer valid. Automation changes the work; it does not remove responsibility.