Monte Carlo vs walk-forward testing
Walk-forward checks whether your strategy still works on data it never saw. Monte Carlo reshuffles the trade sequence to test how fragile the result is to luck and order.
What walk-forward answers
Walk-forward answers whether the edge persists out-of-sample: tune on one window, test on the next, and repeat. It protects against overfitting to a single period.
What Monte Carlo answers
Monte Carlo answers whether the result could be luck. By reshuffling trades or resampling equity, it shows how often the same edge appears by chance alone.
Use both together
Neither test is enough alone. Walk-forward validates temporal stability, Monte Carlo validates statistical significance. A robust strategy should survive both.