*Over-reliance on Backtesting*: Many traders overemphasize backtesting, assuming a strategy that performed well historically will continue to do so. However, this approach neglects the impact of future market changes, black swan events, and shifting economic conditions. A strategy that worked perfectly in the past may fail miserably in new market environments. Traders should balance backtesting with forward-looking analysis, adaptability, and continuous strategy refinement to stay ahead of evolving market dynamics. By doing so, they can avoid the trap of relying solely on historical performance. Stay flexible.
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