Systematic Advantage #4 Allows for robustness testing
Robustness testing is a crucial step in evaluating the effectiveness of a trading system. It involves testing the system’s performance under various market conditions and scenarios to ensure it’s not over-optimized or reliant on specific conditions. Systematic trading simplifies the process of conducting robustness testing by providing a consistent framework for testing multiple scenarios and variations of the trading system. This helps traders identify system flaws and make necessary improvements to enhance its performance and reliability. In doing so, systematic trading minimizes the risk of the system performing poorly in live trading due to untested or overly-optimized parameters.
