The useful starting point
Compare like with like. A backtest, a simulated combination and a live account each answer a different question.
Three records, three different meanings
A backtest applies a set of rules to historical data under a specified collection of assumptions. A hypothetical portfolio combines selected strategy histories and allocations. A live account records what happened to an actual account after orders, fills, cash movements and other activity.
SquaredQ’s factsheets describe model or backtest results. Portfolio Studio creates hypothetical combinations. The authenticated account dashboard shows account NAV and related changes. Those figures should be identified by their source, rather than described with one interchangeable word such as “performance.”
The assumptions inside a backtest
A research result depends on the data, the instruments included, the timing of decisions and the way orders are modeled. Costs, financing, corporate actions and missing data can also matter. A backtest can overstate how well a strategy would have worked if it uses information unavailable at the time or excludes unsuccessful instruments.
Look for a clear date range and a distinction between the period used to develop the model and any out-of-sample period. Then check what was changed after the researchers saw those results. A long chart is helpful only when you understand how it was produced.
Why a live account can diverge
A live account has a particular size, broker, buying power and set of permissions. Whole-share rounding, manual positions, market hours, outages, risk stops and execution prices can all change its result. Two subscribers receiving the same targets can therefore experience different trades and returns.
Cash movements also need attention. If a customer deposits money, account NAV rises even if no strategy made a profit. A percentage change in NAV is not automatically a cash-flow-adjusted investment return. Read the metric definition before comparing the account with a benchmark.
Read the evidence before the headline
Ask whether returns are gross or net of relevant costs, which benchmark is used, and whether the periods and leverage assumptions match. Compare drawdowns, volatility and recovery alongside returns. An audit claim needs a specific report, scope, period and methodology; it should not be assumed from a label.
See how to read performance evidence and the risk and performance disclosures. No historical record establishes a guaranteed future outcome.
