Monte Carlo Trade Sequence Simulation: Auditing Real Maximum Drawdown [2026]
Date Published
1. Why Chronology Lies in Backtesting
The Illusion of Smooth Equity Curves
If your 10 losing trades were evenly distributed among 50 winning trades, your historical equity curve looked smooth. If those exact same 10 losing trades had clustered consecutively at the start of your live deployment, your account would have suffered catastrophic drawdown.
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