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Backtesting & Validation Checklist

Paper-to-Live Transition Checklist

The gap between paper and live is where most strategies die: real fills cost more, latency is real, and the operational machinery can fail in ways a simulation never models. This checklist governs the transition itself, not the backtest that preceded it.

13 ITEMSPublished May 26, 2026Live Content
By AI Fin Hub Research · AI Fin Hub Team

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Move item by item and keep your place

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Checklist Sections

Work in focused batches instead of one long wall

Section 1

Phase 1: Cost and fill reconciliation

3 items
Use The ToolPlaygrounds

Execution Simulator

Model realistic order fills — square-root market impact, linear temporary impact, latency jitter, partial fills, and queue position. See the real cost.

ToolOpen ->
Use The ToolComparators

Broker API Comparator

Alpaca vs IBKR vs Tradier vs Schwab vs Robinhood — compare auth, rate limits, order types, market data, MCP, and fees before wiring a line of code.

ToolOpen ->
Use The ToolCalculators

Statistical Arbitrage Capacity Calculator

Maximum strategy AUM from signal half-life, daily volume, slippage, fees, and target Sharpe. Square-root impact closed-form.

ToolOpen ->

Section 2

Phase 2: Operational readiness

4 items

Section 3

Phase 3: Controlled ramp

3 items

Section 4

Phase 4: Live-versus-sim monitoring

3 items

Pro Tips

Small moves that make the checklist easier to finish

The first live week is a plumbing test, not a profit test. Size it so that being wrong about execution costs you tubing fees, not your capital.
Live-versus-backtest tracking error is the most informative number in the transition. A clean strategy tracks the sim tightly; a divergence is an unmodeled cost or bug demanding a stop.
Reconcile positions against the broker on a timer. A single missed fill that desyncs your state will quietly poison every decision that follows until you notice.

Try These Tools

Run the numbers next

CalculatorsCalculator

Drawdown-Recovery Markov Simulator

Time to recover from an N% drawdown given monthly Sharpe + skew + kurtosis. Cornish-Fisher Monte Carlo, percentile distribution of recovery months.

Launch toolOpen ->

Sources & References

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Planning estimates only — not financial, tax, or investment advice.