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patcap's avatar

Thanks for writing these very practical advice posts.

How is the approach different from monte Carlo data to do the same? Assuming monte carlo also just uses the same backtest data to simulate the distribution.

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Lucas's avatar

Hi, I'm not sure to understand the question 100%. If the question is, can we simulate the future using the returns distribution from the backtest and quit the strategy when the current returns is diverging from the Monte Carlo simulation?

The answer is yes. If it wasn't your question, please just rephrase it!

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patcap's avatar

Yeah. What you described is what i meant. I'm trying to understand how that approach differs from what you described.

'Simulate the future using the returns distribution from the backtest and quit the strategy when the current returns is diverging from the Monte Carlo simulation.'

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