I heard this definition of simulation when I was an undergraduate student. Because it was funny and intuitive, I found it very interesting to use this term to define simulation.The great utility and insight behind this definition is the ability to simulate what I wish.That is, the author of the phrase is not worried about obeying any rules or fixed protocols. Rather, he is concerned to investigate and be flexible.The pure and simple simulation (backtesting) argues and justifies strategies in High Frequency Trading, as it depicts an alternate reality. You can return to the past.Like any representation of the real fact, simulation can bring risks to the analysis,Read more at:Backtesting,the good guy or the bad gay?However, the power that it has to estimate and project the behavior of the system is used as a guide to the entire development cycle of the investment strategy. The technique of simulation and backtesting allowed the quantitative style of financial management.Related post:Why Quantitative Investment Outpeforms?
