Look-Ahead Bias

What does it Mean? Bias created by the use of information or data in a study or simulation that would not have been known or available during the period being analyzed. This will usually lead to inaccurate results in the study or simulation.
Investopedia Says... If an investor is backtesting the performance of a trading strategy, it is vital that he or she only uses information that would have been available at the time of the trade. For example, if a trade is simulated based on information that was not available at the time of the trade - such as a quarterly earnings number that was released three months later - it will diminish the accuracy of the trade's true performance.

Terms Related Links

Attribute Bias
Backtesting
Chartist
Data Mining
Forecasting
Sample
Sample Selection Bias
Technical Analysis

Terms Related Links
Four-Week Rule Boosts Winning Trades - Acquaint yourself with an indicator that played a role in the early development of technical analysis.

Backtesting: Interpreting the Past - We offer some tips on this process that can help refine your current trading strategies.




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