In this episode of Top Traders Unplugged, I join host Niels Kaastrup-Larsen to explore the often misunderstood world of backtests and their role in trading. We delve into why backtests, despite their popularity, can be misleading and why relying too heavily on them might not be the best approach for predicting future market performance. I share my thoughts on the limitations of backtesting and emphasize the importance of understanding the real drivers of market prices, which go beyond historical data and are rooted in the collective behavior of traders.

We also discuss how the actions of traders, influenced by various models and strategies, create trends and mean reversion in the markets. This episode provides practical insights into the dynamics of market movements and challenges conventional wisdom around backtesting.

Whether you’re a seasoned trader or just starting out, this conversation offers valuable perspectives that could reshape your approach to trading strategies.

Click on this link to listen to the podcast.