Why Backtesting Needs Realistic Execution Assumptions

A backtest can look profitable when it assumes perfect entries, instant fills, and no transaction costs.

Real trading is less convenient.

Market orders can slip. Limit orders may not fill. Fees accumulate, and fast markets can create execution challenges.

I want my testing process to reflect these realities as closely as possible.

Even a promising backtest is not proof of future profitability, but unrealistic assumptions can make the results misleading before live trading even begins.