Backtest
A simulation of a strategy using historical data and fixed rules.
Maximum drawdown
The largest peak-to-trough decline in an equity curve.
Slippage
The difference between an expected execution price and the actual fill price.
Walk-forward validation
A time-ordered validation process that repeatedly trains on past data and tests on later data.
Overfitting
When a model or strategy learns historical noise instead of durable structure.
Feature engineering
The process of converting raw data into model inputs.
Sharpe ratio
A return-to-volatility metric often used to compare risk-adjusted performance.
Turnover
How much of a portfolio is traded over a period.