Signal Monitors · Lesson 5.4
Monitor alerts vs backtests
Monitors and backtests share the strategy rules but answer different questions. A monitor asks 'does this fire today?'. A backtest asks 'when would this have fired across history?'.
Where they differ
| Aspect | Monitor | Backtest |
|---|---|---|
| Data window | Latest available | Full historical period you select |
| Universe | Current symbols in the chosen list | Point-in-time membership where applicable |
| Output | Real-time matches and alerts | Trade log, returns, drawdown |
| Trade simulation | None — it only flags | Full portfolio simulation |
Practical implications
- A monitor match might not have been a backtest trade — for example, because the position would already have been open.
- A backtested trade might never appear as a monitor match — for example, because today's conditions no longer hold.
- Use the two together: backtest first, monitor only after the backtest looks sensible.
Related
- What is a backtest?Backtesting
- What are real-time matches?Signal Monitors