Performance numbers come in two kinds, and mixing them up is the easiest way to be misled. A backtest is a replay of the past. A live record is what really happened as signals were sent.
| Backtest | Live record | |
|---|---|---|
| What it is | Rules applied to past data | Signals issued in real time |
| Nature | Hypothetical | Actual |
| Main risk | Hindsight and over-fitting | Small sample, selected periods |
| Best use | Understand how a plan behaves across long periods | Judge what the service really did |
What Can Distort a Backtest
- →Hindsight: rules tuned until the past looks good.
- →Costs: fees and slippage may not be fully reflected.
- →Missed fills: not every signal is fillable at the stated price.
- →Over-fitting: a plan that matches the past may not match the future.
What Can Distort a Live Record
- →A short period or a small number of trades.
- →A selected subset, such as one favourable filter shown without the rest.
- →Winners shown, losers left out.
What to Demand
- 1.Clear labels: which figures are live and which are backtested.
- 2.Dates and sample size for every number.
- 3.Losses included, not only wins.
- 4.Drawdown shown with the gain.
- 5.Plain language that results do not predict the future.
How The Secret Vault labels it
The Capital Model states the settings it used, and the closed-call figures on the page come from one saved filter of the live record, so they will not match every setting. Results vary and are not a promise.
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Try The Secret Vault FreeWhich should I trust more?
Neither completely. A live record is more real, a backtest covers more history. Read both with their limits in mind.