Why Bad Data Quietly Kills Trading Systems
StatsEdgeTrading
This week on Line Your Own Pockets, Dave and I got into the least glamorous topic in systematic trading: data. Not indicators, not AI, not the shiny new backtester — the boring pipes underneath everything. And it’s the part that quietly makes or breaks every system you’ll ever build.
Three things worth remembering:
Bad data almost always works against you. Errant ticks inflate backtests, fill you on prices that never existed, and turn mediocre mean reversion systems into fake millionaires. You rarely get lucky in the other direction.
Match your data to your timeframe. Weekly systems can survive free broker feeds. Daily swing trading wants something like Norgate. Intraday needs a tight, reliable feed like IQFeed. The shorter the horizon, the less room for slippage between research and reality.
Don’t chase tick data if you haven’t built a profitable daily strategy yet. That’s the gym-bro balancing on a ball when he still hasn’t picked up a barbell.
Action plan: pick one system. Run it through the same data provider in backtest and live. Reconcile the fills. If the two don’t match, you don’t have a strategy — you have a simulation.
For backtested swing, day trading, and investing systems running on clean data, visit www.statsedgetrading.com.