Investment & trading encyclopedia

Understand investment products, market mechanics, indicators and research terminology. Each entry includes an explanation, example, cautions and related learning.

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Backtesting & researchIntermediate

Look-Ahead Bias

Look-ahead bias occurs when a backtest uses information that would not have been available at the simulated decision time, such as a price, report or revision published later. It inflates results because the test knows something the real decision-maker could not.