← Glossary

Look-ahead bias

Look-ahead bias creeps in when a backtest's rule evaluation accidentally sees future data — using a day's closing price to decide an entry that would have had to happen intraday, for instance. It inflates backtest results in a way that's easy to miss, since the backtest still runs and produces numbers; the numbers just describe a strategy that couldn't actually have been traded that way.

This explains what look-ahead bias measures. It isn't investment advice — see the disclaimer.