A simulation is not a single profit line. It is four numbers together. They make sense only when you read them side by side.
Closed sells
The cleanest realized result. Buys that hit their take-profit inside the selected period. They show what the plan actually "locked in" as profit.
Be careful, though. A plan can show strong closed profit while still holding many open positions that never reached their target. Closed profit on its own is not the full picture. It is half of it.
Open positions
These are the buys that did not close at the take-profit before the period ended. The ones still "waiting." They matter because they show what is unresolved.
- Ending with few open positions means the plan almost finished its cycle inside the period.
- Ending with many open positions means the closed profit is a partial truth. The rest depends on what happens next.
Always ask: what would happen if the period ran one more quarter? Open positions are the answer that closed profit hides.
Average and max capital
Two angles on the same thing. How much of your money was actually tied up in the plan:
- Average locked capital: how much was open on average across the period.
- Max locked capital: the worst single point of exposure.
The number your wallet must survive is the max, not the average. If you could not have left that much open, the plan is hard to run in practice. No matter how positive the backtest looks.
ROI on average capital
ROI based on average capital compares realized profit with the money that was actually tied up. It is a more honest number than absolute profit, because it normalizes the result against the risk you ran.
Read like this, the simulation becomes a decision tool. Not a billboard for a single impressive number.
