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Algorithmic Trading Strategies Face Alpha Erosion in Live Markets

Algorithmic Trading Strategies Face Alpha Erosion in Live Markets

Author:

Global Cryptocurrency

Published:

2025-11-27 18:46:03

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BTCCSquare news:

Algorithmic trading has moved beyond basic technical indicators like Moving Averages and RSI, evolving into complex systems that demand robustness and adaptive risk management. Yet many strategies fail to translate from backtesting to live execution due to overlooked market realities—slippage, latency, and microstructure noise.

The 'alpha erosion problem' plagues Quant traders who rely on idealized simulations. A strategy with a flawless backtest equity curve can unravel when faced with volatile fills or liquidity gaps. The solution lies in stress-testing beyond historical data, incorporating real-world execution friction into models.

By:

Retail Investors Drive Historic 23-Month Equity Buying Streak Amid Shifting Asset Preferences

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