Look-ahead bias
Also called: lookahead bias, point-in-time data
An error in a backtest that uses information not available at the time of a trade, such as later results, revised data or the same day's close.
Common sources are executing at the close that generated a signal, using annual results before they were published, choosing shares by today's index membership, and tuning settings on the whole test period. Point-in-time data, showing only what was known on each date, avoids it.
Learn more in these lessons
- Survivorship, look-ahead and other backtesting biasesWhy do backtests built on real data still give unrealistic results?
Related terms
Spotted a mistake or something unclear? Report it by email. Here is how corrections work.