Heisenberg Uncertainty Principle
Definition of 'Heisenberg Uncertainty Principle'
When applied to trading this means that your action in the market had an impact on the outcome of the market for that day and your inaction would have also had an impact. So if you are back testing a trading strategy you make the (invalid) assumption that you could have bought or sold a stock or future at a given price and the market would have continued as it had done and you would have made a certain profit or loss. However, your action in the market could have influenced where the market traded to invalidating your back tested results.
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