https://thealgobench.com/landmines/Recent content in Landmines on The Algo BenchHugoen-INWed, 07 Oct 2026 00:00:00 +0000https://thealgobench.com/landmines/survivorship-bias/Wed, 07 Oct 2026 00:00:00 +0000https://thealgobench.com/landmines/survivorship-bias/<h2 id="the-trap">The trap</h2> <p>You want to test a stock strategy on the NIFTY 500, so you download the list of NIFTY 500 stocks and run your rules over the last ten years. The problem is that the list you downloaded is <strong>today&rsquo;s</strong> list. It contains only the companies that are still big and still listed. Every company that collapsed, was delisted, merged away or simply shrank out of the index along the way has disappeared from your test.</p>https://thealgobench.com/landmines/trading-the-untradable/Wed, 07 Oct 2026 00:00:00 +0000https://thealgobench.com/landmines/trading-the-untradable/<h2 id="the-trap">The trap</h2> <p>The NIFTY 50 index is a calculated number, not something you can trade. When a backtest buys and sells &ldquo;NIFTY&rdquo; at the index&rsquo;s own 1-min or 5-min high, low and close, it assumes fills at prices that may never have existed on any tradeable instrument. Real trades happen in futures, options or a <strong>synthetic future</strong> (a long call plus a short put at the same strike, which behaves like a future).</p>https://thealgobench.com/landmines/what-a-strangle-really-costs/Wed, 07 Oct 2026 00:00:00 +0000https://thealgobench.com/landmines/what-a-strangle-really-costs/<h2 id="the-trap">The trap</h2> <p>Using a rule-of-thumb cost per trade (&ldquo;call it 2 points a leg, each way&rdquo;) instead of a cost model built up from the actual charges and checked against real fills.</p> <h2 id="how-it-fools-you">How it fools you</h2> <p>The error can run either way, and both directions are expensive:</p>