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Backtesting

Monte Carlo Simulation

Resampling trade outcomes many times to get a distribution of results instead of one number.

A Monte Carlo simulation takes the trades a strategy produced and reshuffles or resamples them thousands of times, building thousands of alternative equity curves. Because the order and selection of trades changes each run, you see the full range of outcomes the same edge could plausibly have produced — not just the single historical path.

The value is honesty about variance. A backtest shows one realised curve; Monte Carlo shows the spread around it, so you can read a median return, a worst-case drawdown band, and how often the strategy would have ended underwater. Judge a strategy by its distribution, not its single lucky or unlucky run.

Beispiel

A strategy's single backtest shows a 12% max drawdown, but Monte Carlo reveals the 95th-percentile drawdown is 28% — a very different risk picture.

Wie Noon Barbari Monte Carlo Simulation nutzt

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