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Need to buy/sell in backtest to recognize paper profits?

Newbie here, basic question:

My in-process algo buys a stock when certain conditions are met. So if I want to hold on to the stock up to and including the current day, how are the performance results calculated?

Does Quantopian assume I sell the stock? Do I only realize paper profits only once the stock has been sold? If the latter is the case, then I should sell it at some point, right?

Second, unrelated question: When I win the contest next month (please suppress your smirk), does Quantopian assume that the algo has to run without any human intervention? I don't think most quant funds work this way: the basic algo runs, but humans are in the loop if significant news or developments impact the outlook for a stock.

1 response

Welcome to Quantopian! The returns are calculated from the start and end point. It takes a look at the portfolio value at the start and portfolio value at the end, calculating a percentage difference. You don't need to sell a stock to take the profit; if the stock rises in value, then your portfolio value will increase.

All winning algos indeed run without human intervention. The algorithm should run independently, processing market data, interpreting the signals, and chug along.The idea is to make them robust and if you need guidance, take a look at these tips we shared: https://www.quantopian.com/posts/tips-for-writing-robust-algorithms-for-the-hedge-fund

Good luck with your entry - maybe your name will be next on the list :)

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