The latest articles on DEV Community by Devf Now (@devfnow). https://dev.to/devfnow https://media2.dev.to/dynamic/image/width=90,height=90,fit=cover,gravity=auto,format=auto/https:%2F%2Fdev-to-uploads.s3.us-east-2.amazonaws.com%2Fuploads%2Fuser%2Fprofile_image%2F4172350%2F6f36d052-6893-4c49-8c43-fd0dae5a564b.png https://dev.to/devfnow en Devf Now Sun, 11 Oct 2026 06:20:50 +0000 https://dev.to/devfnow/three-ways-my-crypto-backtests-lied-to-me-and-the-checks-that-caught-them-4l47 https://dev.to/devfnow/three-ways-my-crypto-backtests-lied-to-me-and-the-checks-that-caught-them-4l47 <p>Over 10+ years of trading we've built and discarded a lot of strategies. The pattern that cost us the most wasn't a bad idea — it was a <em>good-looking backtest</em> that quietly lied. Here are the three lies that fooled us most, and the cheap checks that catch them. They apply no matter what tool you use.</p> <h2> 1. Acting one bar late </h2> <p>One rule we were excited about showed roughly <strong>+120% over 90 days</strong> in a backtest. Then we re-ran it evaluating the signal on the <em>previous</em> closed bar — which is what you actually get once a bot reacts a candle after the condition fires. It collapsed to about <strong>+17%</strong>. Nothing else changed.</p> <p>Most of the "edge" was really the backtest peeking at the same candle it traded on.</p> <p><strong>The check:</strong> shift every indicator back one bar and re-run. If the edge mostly survives, it's probably real. If it evaporates, you were trading on information you won't have live. Your live execution has to act on the <em>exact</em> closed bar, or the strategy isn't the strategy you tested.</p> <h2> 2. Leverage without liquidation </h2> <p>A lot of backtesters compute PnL at leverage as if the position always survives to your stop. At 10× a 10% adverse wick isn't a drawdown — it's a <strong>liquidation</strong>. Several leveraged variants that looked great went <em>negative</em> the moment we force-closed positions at the liquidation price instead of pretending it wasn't there.</p> <p><strong>The check:</strong> model the liquidation price for each position and close there, intrabar, using the candle's high/low — before your stop logic ever runs.</p> <h2> 3. Fees, fills, and one lucky season </h2> <p>Three smaller lies that stack up:</p> <ul> <li> <strong>Fees:</strong> the same rule went from <strong>+120% to +64%</strong> when we stress-tested fees from 0.05% to 0.15% per side. If a strategy only works at zero fees, it doesn't work.</li> <li> <strong>Fills:</strong> a backtest "take-profit" that assumes a wick <em>touch</em> fills your resting limit order is optimistic — on a fast candle it may not fill at all.</li> <li> <strong>One season:</strong> 90 days of one summer is not a sample. A rule that only works in one regime is a story, not an edge.</li> </ul> <p><strong>The check:</strong> stress the fees, be pessimistic about fills, and test across different market conditions.</p> <h2> Why we're telling you this </h2> <p>We got tired of tools that made it easy to fool ourselves, so we built the one we wanted: <strong>Tradsist</strong> — build a strategy from dropdown conditions (no code), backtest on real exchange candles <em>with fees</em>, with liquidation modelled on leveraged trades and intrabar take-profit/stop handling, then paper trade it on live candles before risking anything. A built-in AI agent can assemble and adjust the rules for you.</p> <p>It's free in the browser, no signup: <strong><a href="https://app.tradsist.com" rel="noopener noreferrer">https://app.tradsist.com</a></strong></p> <p>We'd genuinely rather hear what's wrong with it than what's right — if you put a rule through it and something looks off, tell us.</p> <p><em>Trading is risky and nothing here is financial advice: <a href="https://tradsist.com/risk" rel="noopener noreferrer">https://tradsist.com/risk</a></em></p> crypto trading algotrading backtesting