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Look-ahead bias

In one line: Using information in a test that you could not have known at that moment.

Example: a backtestTesting a rule on old prices. that buys at 9:30 because 'today closes higher'. You only know the close at the end of the day. It is like betting on a match you already watched.

It sneaks in easily, through things like daily highs used before the day is over. A good Backtest checks the timestamp of every piece of data.

Related

Sources & studies

  1. Investopedia (secondary): Look-ahead bias

Trading termsBacktestSurvivorship bias

Last checked: 2026-11-04 · Educational, not financial advice.

Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.