Has anyone compared the results of actual testing backtest screen results with buying the stocks in a virtual trading account for say 3 months and compared the results to see how much difference there is between the two?


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carnuts55 at 01/04/18 9:10 AM : RE: virtual trading vs backtest " I have gone to backtesting YTD to check my strategy against real results, real trades. For two years 2015 and 2016 they did well.  Within 1-2%.  However in 2017 a major problem occured that I am trying to find an answer to.  My real results were just below 20% when the backtest results were 96%.  When I check the details of the str..."

TWQS1 at 01/11/18 2:49 PM : RE: virtual trading vs backtest " I believe you have it right ..."

Norman at 01/11/18 10:32 AM : RE: virtual trading vs backtest " If I understand this correctly, RW accounts for dividends so the return would be slightly higher for a portfolio with stocks that pay dividends.     Total Return of Portfolio % – the return of the portfolio comprised of stocks that passed the screening criteria for the period. The returns are "forward - looking" - that is t..."

donihue at 01/10/18 12:58 PM : RE: virtual trading vs backtest " I have not compared RW to actual results, but in my 6 January post on "Accounting for real-world factors in backtesting", I included a VBA subroutine which attempts to check RW's stated backtesting results for a given strategy. Even assuming zero transaction costs and zero price slippage, I invariably find smallish differences each per..."

TWQS1 at 01/04/18 9:16 AM : RE: virtual trading vs backtest " I'd be interested in your findings.  Thanks for the post. ..."

DrewM at 12/06/16 12:03 PM : RE: virtual trading vs backtest " It depends on the how often the trades are made and the bid/ask spread on the stocks you buy. Lets assume you do weekly trading, but do your buys and sells at around 11AM every Monday. Backtesting uses the close price as of Friday and assumes that is the buy price, and the following week with weekly trading, uses the Friday close p..."

TWQS1 at 01/22/18 7:37 AM : RE: virtual trading vs backtest " I buy and sell every 6th market day.  So I don't follow the Monday buying approach.  My average APR is approximately 56% using just RW.  The Friday versus Monday discussion is real but of no actual consequence in my opinion.  If you get a trade signal to buy or sell in any software your actual fill will sometimes be better and so..."


It depends on the how often the trades are made and the bid/ask spread on the stocks you buy.

Lets assume you do weekly trading, but do your buys and sells at around 11AM every Monday.

Backtesting uses the close price as of Friday and assumes that is the buy price, and the following week with weekly trading, uses the Friday close price as the sell price. If in reality, you make your trades on Monday at ~ 11 AM as I do, the backtesting will use a buy price that is different from your actual Monday AM buy price, and a sell price that is different from your Mon AM sell price. So it is really a slight out of phase difference between the Friday close and when you do your buys and sells, theoretically its a wash over time.

The bigger issue with frequent trading is bid/ask spreads associated with small cap, OTC, or infrequently traded stocks. You can lose a lot if the bid/ask spread is wide.

FYI, I  use FolioFn platform because it allows unlimited trades for $29 a month, which supports doing basket trades daily at 11 AM and 2 PM with automatic rebalancing of fractional shares to get to the portfolio and percentages you specify. I run RW on Sunday to get my list of stocks, and put those in for the Mon AM trading window and update it weekly. I will run a test to see how the backtesting compares to the actual returns I get using this method and try to remember to report that back to you. I have a filter on my screen that the price*volume (20 day avg trading vol) has to be greater than $500,000  so I don't pick thinly traded stocks by accident.

Some of the default screens are phony IMO because they include micro-cap stocks and you will NEVER get those levels of performance in real life because the bid/ask spread on micro-caps can be significant. Good luck with everything, hope this info helps


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