The disciplined loop that takes an idea from a hunch to a live, monitored bot — and the traps at each stage.
Amateurs code a strategy and switch it on live. Professionals move through a workflow designed to kill bad ideas cheaply, before they cost real money. This is the loop you will run for every strategy in this course.
The workflow. Most ideas die at "backtest" or "robustness" — that is the point. Live is the last, not the first, step.
The five stages
Idea — a hypothesis with a *reason*: "gold tends to trend after London open". If you cannot say why it might work, you cannot tell luck from edge.
Backtest — replay the rule over history with realistic costs. Most ideas die here. Good.
Robustness — does it survive different periods, parameters, and instruments? Or did you just curve-fit noise? (Part 6.)
Paper trade — run it live on fake money to catch the bugs a backtest cannot: latency, data gaps, broker quirks.
Live, small — turn it on with money you can afford to lose, sized tiny, and scale only once reality matches the paper results.
What you now know
You can define algo trading, read any strategy as the four-step core loop, explain what your order actually does to the book, name the five components of a system, and run the workflow that separates edges from luck. That is the vocabulary the rest of the course is built on.
Next up, Part 3: setting up Python and getting clean market data into your hands — the raw material every strategy needs.